Medicare Program; CY 2020 Revisions to Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Medicaid Promoting Interoperability Program Requirements for Eligible Professionals; Establishment of an Ambulance Data Collection System; Updates to the Quality Payment Program; Medicare Enrollment of Opioid Treatment Programs and Enhancements to Provider Enrollment Regulations Concerning Improper Prescribing and Patient Harm; and Amendments to Physician Self-Referral Law Advisory Opinion Regulations Final Rule; and Coding and Payment for Evaluation and Management, Observation and Provision of Self-Administered Esketamine Interim Final Rule

Cited as:84 FR 62998
Court:Centers For Medicare & Medicaid Services
Publication Date:15 Nov 2019
Record Number:2019-24086
Federal Register, Volume 84 Issue 221 (Friday, November 15, 2019)
[Federal Register Volume 84, Number 221 (Friday, November 15, 2019)]
                [Rules and Regulations]
                [Pages 62568-63563]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-24086]
                [[Page 62567]]
                Vol. 84
                Friday,
                No. 221
                November 15, 2019
                Part II
                Department of Health and Human Services
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                Centers for Medicare & Medicaid Services
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                42 CFR Parts 403, 409, 410, et al.
                Medicare Program; CY 2020 Revisions to Payment Policies Under the
                Physician Fee Schedule and Other Changes to Part B Payment Policies;
                Medicare Shared Savings Program Requirements; Medicaid Promoting
                Interoperability Program Requirements for Eligible Professionals;
                Establishment of an Ambulance Data Collection System; Updates to the
                Quality Payment Program; Medicare Enrollment of Opioid Treatment
                Programs and Enhancements to Provider Enrollment Regulations Concerning
                Improper Prescribing and Patient Harm; and Amendments to Physician
                Self-Referral Law Advisory Opinion Regulations Final Rule; and Coding
                and Payment for Evaluation and Management, Observation and Provision of
                Self-Administered Esketamine; Final and Interim Final Rules
                Federal Register / Vol. 84 , No. 221 / Friday, November 15, 2019 /
                Rules and Regulations
                [[Page 62568]]
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                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Centers for Medicare & Medicaid Services
                42 CFR Parts 403, 409, 410, 411, 414, 415, 416, 418, 424, 425, 489,
                and 498
                [CMS-1715-F and IFC]
                RIN 0938-AT72
                Medicare Program; CY 2020 Revisions to Payment Policies Under the
                Physician Fee Schedule and Other Changes to Part B Payment Policies;
                Medicare Shared Savings Program Requirements; Medicaid Promoting
                Interoperability Program Requirements for Eligible Professionals;
                Establishment of an Ambulance Data Collection System; Updates to the
                Quality Payment Program; Medicare Enrollment of Opioid Treatment
                Programs and Enhancements to Provider Enrollment Regulations Concerning
                Improper Prescribing and Patient Harm; and Amendments to Physician
                Self-Referral Law Advisory Opinion Regulations Final Rule; and Coding
                and Payment for Evaluation and Management, Observation and Provision of
                Self-Administered Esketamine Interim Final Rule
                AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
                ACTION: Final rule and interim final rule.
                -----------------------------------------------------------------------
                SUMMARY: This major final rule addresses: Changes to the physician fee
                schedule (PFS); other changes to Medicare Part B payment policies to
                ensure that payment systems are updated to reflect changes in medical
                practice, relative value of services, and changes in the statute;
                Medicare Shared Savings Program quality reporting requirements;
                Medicaid Promoting Interoperability Program requirements for eligible
                professionals; the establishment of an ambulance data collection
                system; updates to the Quality Payment Program; Medicare enrollment of
                Opioid Treatment Programs and enhancements to provider enrollment
                regulations concerning improper prescribing and patient harm; and
                amendments to Physician Self-Referral Law advisory opinion regulations.
                In addition, we are issuing an interim final rule with comment period
                (IFC) to establish coding and payment for evaluation and management,
                observation and the provision of self-administered Esketamine to
                facilitate beneficiary access to care for treatment-resistant
                depression as efficiently as possible.
                DATES:
                    Effective date: These regulations are effective on January 1, 2020.
                    Comment date: Comments will be accepted/considered ONLY on the
                Interim Rule ``Coding and Payment for Evaluation and Management,
                Observation and Provision of Self-Administered Esketamine'' contained
                in section V. of the preamble of this document. To be assured
                consideration, comments must be received at one of the addresses
                provided below, no later than 5 p.m. on December 31, 2019.
                ADDRESSES: In commenting, please refer to file code CMS-1715-IFC.
                Because of staff and resource limitations, we cannot accept comments by
                facsimile (FAX) transmission.
                    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-1715-IFC, 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-1715-IFC, Mail
                Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
                    For information on viewing public comments, see the beginning of
                the SUPPLEMENTARY INFORMATION section.
                FOR FURTHER INFORMATION CONTACT:
                    Jamie Hermansen, (410) 786-2064, for any issues not identified
                below.
                    Michael Soracoe, (410) 786-6312, for issues related to practice
                expense, work RVUs, conversion factor, and impacts.
                    Geri Mondowney, (410) 786-1172, or Tourette Jackson, (410) 786-
                4735, for issues related to malpractice RVUs and geographic practice
                cost indices (GPCIs).
                    Larry Chan, (410) 786-6864, or Geri Mondowney, (410) 786-1172, for
                issues related to potentially misvalued services under the PFS.
                    Lindsey Baldwin, (410) 786-1694, Emily Yoder, (410) 786-1804, or
                Patrick Sartini, (410) 786-9252, for issues related to telehealth
                services.
                    Pierre Yong, (410) 786-8896, or Lindsey Baldwin, (410) 786-1694,
                for issues related to Medicare coverage of opioid use disorder
                treatment services furnished by opioid treatment programs (OTPs).
                    Lindsey Baldwin, (410) 786-1694, for issues related to bundled
                payments under the PFS for substance use disorders.
                    Emily Yoder, (410) 786-1804, or Christiane LaBonte, (410) 786-7237,
                for issues related to the comment solicitation on opportunities for
                bundled payments under the PFS.
                    Regina Walker-Wren, (410) 786-9160, for issues related to physician
                supervision for physician assistant (PA) services and review and
                verification of medical record documentation.
                    Ann Marshall, (410) 786-3059, Emily Yoder, (410) 786-1804, Liane
                Grayson, (410) 786-6583, or Christiane LaBonte (410) 786-7237, for
                issues related to care management services.
                    Terry Simananda, (410) 786-8144, for issues related to interim
                final rule with comment period (payment for self-administered
                esketamine).
                    Kathy Bryant, (410) 786-3448, for issues related to coinsurance for
                colorectal cancer screening tests and global surgery data collection.
                    Pamela West, (410) 786-2302, for issues related to therapy
                services.
                    Ann Marshall, (410) 786-3059, Emily Yoder, (410) 786-1804, or
                Christiane LaBonte, (410) 786-7237, for issues related to payment for
                evaluation and management services.
                    Thomas Kessler, (410) 786-1991, for issues related to ambulance
                physician certification statement.
                    Felicia Eggleston, (410) 786-9287, or Amy Gruber, (410) 786-1542,
                for issues related to the ambulance fee schedule and the requirements
                related to the Medicare ground ambulance data collection system.
                    Linda Gousis, (410) 786-8616, for issues related to intensive
                cardiac rehabilitation.
                    David Koppel, (303) 844-2883, or Elizabeth LeBreton, (202) 615-
                3816, for issues related to the Medicaid Promoting Interoperability
                Program.
                    Fiona Larbi, (410) 786-7224, for issues related to the Medicare
                Shared Savings Program (Shared Savings Program) Quality Measures.
                    Katie Mucklow, (410) 786-0537, or Diana Behrendt (410) 786-6192,
                for issues related to open payments.
                    Cheryl Gilbreath, (410) 786-5919, for issues related to home
                infusion therapy benefit.
                    Joseph Schultz, (410) 786-2656, for issues related to Medicare
                enrollment of opioid treatment programs, and enhancements to provider
                enrollment regulations concerning improper prescribing and patient
                harm.
                [[Page 62569]]
                    Jacqueline Leach, (410) 786-4282, for issues related to Deferring
                to State Scope of Practice Requirements: Ambulatory Surgical Centers
                (ASC).
                    Mary Rossi-Coajou, (410) 786-6051, for issues related to Deferring
                to State Scope of Practice Requirements: Hospice.
                    [email protected], for issues related to Advisory
                Opinions on Application of the Physician Self-referral law.
                    Molly MacHarris, (410) 786-4461, for inquiries related to Merit-
                based Incentive Payment System (MIPS).
                    Brittany LaCouture, (410) 786-0481, for inquiries related to
                Alternative Payment Models (APMs).
                    Patricia Taft, (410) 786-4561, for issues related to Physician
                Self-Referral Law: Annual Update to the List of CPT/HCPCS Codes Annual
                Update.
                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://regulations.gov. Follow the search instructions on that website to view
                public comments.
                    Addenda Available Only Through the Internet on the CMS Website: The
                PFS Addenda along with other supporting documents and tables referenced
                in this final rule are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/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
                2020 PFS final rule, refer to item CMS-1715-F. Readers with questions
                related to accessing any of the Addenda or other supporting documents
                referenced in this final rule and posted on the CMS website identified
                above should contact Jamie Hermansen at (410) 786-2064.
                    CPT (Current Procedural Terminology) Copyright Notice: Throughout
                this final rule, we use CPT codes and descriptions to refer to a
                variety of services. We note that CPT codes and descriptions are
                copyright 2019 American Medical Association. All Rights Reserved. CPT
                is a registered trademark of the American Medical Association (AMA).
                Applicable Federal Acquisition Regulations (FAR) and Defense Federal
                Acquisition Regulations (DFAR) apply.
                I. Executive Summary
                A. Purpose
                    This major final rule revises payment polices under the Medicare
                PFS and makes other policy changes, including provisions to implement
                certain provisions of the 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, applicable to
                services furnished in CY 2020 and thereafter. In addition, this final
                rule includes provisions related to other payment policy changes that
                are addressed in section III. of this final rule.
                    To facilitate beneficiary access to treatment for treatment-
                resistant depression (TRD) as using esketamine, we are creating two new
                HCPCS G codes, G2082 and G2083, effective January 1, 2020 on an interim
                final basis. For 2020, we are establishing RVUs for these services that
                reflect the relative resource costs associated with the evaluation and
                management (E/M), observation and provision of the self-administered
                esketamine product.
                1. Summary of the Major Provisions
                    The statute requires us to establish payments under the PFS based
                on national uniform relative value units (RVUs) that account for the
                relative resources used in furnishing a service. The statute requires
                that RVUs be established for three categories of resources: Work;
                practice expense (PE); and malpractice (MP) expense. In addition, the
                statute requires that we establish by regulation each year's payment
                amounts for all physicians' services paid under the PFS, incorporating
                geographic adjustments to reflect the variations in the costs of
                furnishing services in different geographic areas.
                    In this final rule, we are establishing RVUs for CY 2020 for the
                PFS to ensure that our payment systems are updated to reflect changes
                in medical practice and the relative value of services, as well as
                changes in the statute. This final rule also includes discussions and
                provisions regarding several other Medicare Part B payment policies,
                Medicare Shared Savings Program quality reporting requirements,
                Medicaid Promoting Interoperability Program requirements for eligible
                professionals, the establishment of a ground ambulance data collection
                system, updates to the Quality Payment Program, Medicare enrollment of
                Opioid Treatment Programs and enhancements to provider enrollment
                regulations concerning improper prescribing and patient harm; and
                amendments to Physician Self-Referral Law advisory opinion regulations.
                Specifically, this final rule addresses:
                 Practice Expense RVUs (section II.B.)
                 Malpractice RVUs (section II.C.)
                 Geographic Practice Cost Indices (GPCIs) (section II.D.)
                 Potentially Misvalued Services under the PFS (section II.E.)
                 Telehealth Services (section II.F.)
                 Medicare Coverage for Opioid Use Disorder Treatment Services
                Furnished by Opioid Treatment Programs (section II.G.)
                 Bundled Payments Under the PFS for Substance Use Disorders
                (section II.H.)
                 Physician Supervision for Physician Assistant (PA) Services
                (section II.I.)
                 Review and Verification of Medical Record Documentation
                (section II.J.)
                 Care Management Services (section II.K.)
                 Coinsurance for Colorectal Cancer Screening Tests (section
                II.L.)
                 Therapy Services (section II.M.)
                 Valuation of Specific Codes (section II.N.)
                 Comment Solicitation on Opportunities for Bundled Payments
                under the PFS (section II.O.)
                 Payment for Evaluation and Management (E/M) Services (section
                II.P.)
                 Ambulance Coverage Services--Physician Certification Statement
                (section III.A.)
                 Ambulance Fee Schedule--Medicare Ground Ambulance Data
                Collection System (section III.B.)
                 Intensive Cardiac Rehabilitation (section III.C.)
                 Medicaid Promoting Interoperability Program Requirements for
                Eligible Professionals (EPs) (section III.D.)
                 Medicare Shared Savings Program Quality Measures (section
                III.E.)
                 Open Payments (section III.F.)
                 Home Infusion Therapy Benefit (section III.G.)
                 Medicare Enrollment of Opioid Treatment Programs and
                Enhancements to Existing General Enrollment Policies Related to
                Improper Prescribing and Patient Harm (section III.H.)
                 Deferring to State Scope of Practice Requirements (section
                III.I.)
                 Advisory Opinions on the Application of the Physician Self-
                Referral Law (section III.J.)
                [[Page 62570]]
                 Updates to the Quality Payment Program (section III.K.)
                 Physician Self-Referral Law: Annual Update to the List of CPT/
                HCPCS Codes (section IV.)
                 Interim Final Rule with Comment Period: Coding and Payment for
                Evaluation and Management, Observation and Provision of Self-
                Administered Esketamine (HCPCS codes G2082 and G2083) (section V.)
                 Collection of Information Requirements (section VI.)
                 Regulatory Impact Analysis (section VII.)
                2. Summary of Costs and Benefits
                    We have determined that this final rule is economically
                significant. For a detailed discussion of the economic impacts, see
                section VII. of this final rule.
                II. Provisions of the Final Rule for the PFS
                A. Background
                    Since January 1, 1992, Medicare has paid for physicians' services
                under section 1848 of the Act, ``Payment for Physicians' Services.''
                The PFS relies on national relative values that are established for
                work, practice expense (PE), and malpractice (MP), which are adjusted
                for geographic cost variations. These values are multiplied by a
                conversion factor (CF) to convert the relative value units (RVUs) into
                payment rates. The concepts and methodology underlying the PFS were
                enacted as part of the Omnibus Budget Reconciliation Act of 1989 (Pub.
                L. 101-239, enacted on December 19, 1989) (OBRA '89), and the Omnibus
                Budget Reconciliation Act of 1990 (Pub. L. 101-508, enacted on November
                5, 1990) (OBRA '90). The final rule published in the November 25, 1991
                Federal Register (56 FR 59502) set forth the first fee schedule used
                for payment for physicians' services.
                    We note that throughout this major final rule, unless otherwise
                noted, the term ``practitioner'' is used to describe both physicians
                and nonphysician practitioners (NPPs) who are permitted to bill
                Medicare under the PFS for the services they furnish to Medicare
                beneficiaries.
                1. Development of the RVUs
                a. Work RVUs
                    The work RVUs established for the initial fee schedule, which was
                implemented on January 1, 1992, were developed with extensive input
                from the physician community. A research team at the Harvard School of
                Public Health developed the original work RVUs for most codes under a
                cooperative agreement with the Department of Health and Human Services
                (HHS). In constructing the code-specific vignettes used in determining
                the original physician work RVUs, Harvard worked with panels of
                experts, both inside and outside the federal government, and obtained
                input from numerous physician specialty groups.
                    As specified in section 1848(c)(1)(A) of the Act, the work
                component of physicians' services means the portion of the resources
                used in furnishing the service that reflects physician time and
                intensity. We establish work RVUs for new, revised and potentially
                misvalued codes based on our review of information that generally
                includes, but is not limited to, recommendations received from the
                American Medical Association/Specialty Society Relative Value Scale
                Update Committee (RUC), the Health Care Professionals Advisory
                Committee (HCPAC), the Medicare Payment Advisory Commission (MedPAC),
                and other public commenters; medical literature and comparative
                databases; as well as a comparison of the work for other codes within
                the Medicare PFS, and consultation with other physicians and health
                care professionals within CMS and the federal government. We also
                assess the methodology and data used to develop the recommendations
                submitted to us by the RUC and other public commenters, and the
                rationale for their recommendations. In the CY 2011 PFS final rule with
                comment period (75 FR 73328 through 73329), we discussed a variety of
                methodologies and approaches used to develop work RVUs, including
                survey data, building blocks, crosswalk to key reference or similar
                codes, and magnitude estimation. More information on these issues is
                available in that rule.
                b. Practice Expense RVUs
                    Initially, only the work RVUs were resource-based, and the PE and
                MP RVUs were based on average allowable charges. Section 121 of the
                Social Security Act Amendments of 1994 (Pub. L. 103-432, enacted on
                October 31, 1994), amended section 1848(c)(2)(C)(ii) of the Act and
                required us to develop resource-based PE RVUs for each physicians'
                service beginning in 1998. We were required to consider general
                categories of expenses (such as office rent and wages of personnel, but
                excluding MP expenses) comprising PEs. The PE RVUs continue to
                represent the portion of these resources involved in furnishing PFS
                services.
                    Originally, the resource-based method was to be used beginning in
                1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L.
                105-33, enacted on August 5, 1997) (BBA of 1997) delayed implementation
                of the resource-based PE RVU system until January 1, 1999. In addition,
                section 4505(b) of the BBA of 1997 provided for a 4-year transition
                period from the charge-based PE RVUs to the resource-based PE RVUs.
                    We established the resource-based PE RVUs for each physicians'
                service in the November 2, 1998 final rule (63 FR 58814), effective for
                services furnished in CY 1999. Based on the requirement to transition
                to a resource-based system for PE over a 4-year period, payment rates
                were not fully based upon resource-based PE RVUs until CY 2002. This
                resource-based system was based on two significant sources of actual PE
                data: the Clinical Practice Expert Panel (CPEP) data; and the AMA's
                Socioeconomic Monitoring System (SMS) data. These data sources are
                described in greater detail in the CY 2012 PFS final rule with comment
                period (76 FR 73033).
                    Separate PE RVUs are established for services furnished in facility
                settings, such as a hospital outpatient department (HOPD) or an
                ambulatory surgical center (ASC), and in nonfacility settings, such as
                a physician's office. The nonfacility RVUs reflect all of the direct
                and indirect PEs involved in furnishing a service described by a
                particular HCPCS code. The difference, if any, in these PE RVUs
                generally results in a higher payment in the nonfacility setting
                because in the facility settings some resource costs are borne by the
                facility. Medicare's payment to the facility (such as the outpatient
                prospective payment system (OPPS) payment to the HOPD) would reflect
                costs typically incurred by the facility. Thus, payment associated with
                those specific facility resource costs is not made under the PFS.
                    Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L.
                106-113, enacted on November 29, 1999) (BBRA) directed the Secretary of
                Health and Human Services (the Secretary) to establish a process under
                which we accept and use, to the maximum extent practicable and
                consistent with sound data practices, data collected or developed by
                entities and organizations to supplement the data we normally collect
                in determining the PE component. On May 3, 2000, we published the
                interim final rule (65 FR 25664) that set forth the criteria for the
                submission of these supplemental PE survey data. The criteria were
                modified in response to comments received, and
                [[Page 62571]]
                published in the Federal Register (65 FR 65376) as part of a November
                1, 2000 final rule. The PFS final rules published in 2001 and 2003,
                respectively, (66 FR 55246 and 68 FR 63196) extended the period during
                which we would accept these supplemental data through March 1, 2005.
                    In the CY 2007 PFS final rule with comment period (71 FR 69624), we
                revised the methodology for calculating direct PE RVUs from the top-
                down to the bottom-up methodology beginning in CY 2007. We adopted a 4-
                year transition to the new PE RVUs. This transition was completed for
                CY 2010. In the CY 2010 PFS final rule with comment period, we updated
                the practice expense per hour (PE/HR) data that are used in the
                calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010,
                we began a 4-year transition to the new PE RVUs using the updated PE/HR
                data, which was completed for CY 2013.
                c. Malpractice RVUs
                    Section 4505(f) of the BBA of 1997 amended section 1848(c) of the
                Act to require that we implement resource-based MP RVUs for services
                furnished on or after CY 2000. The resource-based MP RVUs were
                implemented in the PFS final rule with comment period published
                November 2, 1999 (64 FR 59380). The MP RVUs are based on commercial and
                physician-owned insurers' MP insurance premium data from all the
                states, the District of Columbia, and Puerto Rico. For more information
                on MP RVUs, see section II.C. of this final rule, Determination of
                Malpractice Relative Value Units.
                d. Refinements to the RVUs
                    Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no
                less often than every 5 years. Prior to CY 2013, we conducted periodic
                reviews of work RVUs and PE RVUs independently. We completed 5-year
                reviews of work RVUs that were effective for calendar years 1997, 2002,
                2007, and 2012.
                    Although refinements to the direct PE inputs initially relied
                heavily on input from the RUC Practice Expense Advisory Committee
                (PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to
                the use of the updated PE/HR data in CY 2010 have resulted in
                significant refinements to the PE RVUs in recent years.
                    In the CY 2012 PFS final rule with comment period (76 FR 73057), we
                finalized a proposal to consolidate reviews of work and PE RVUs under
                section 1848(c)(2)(B) of the Act and reviews of potentially misvalued
                codes under section 1848(c)(2)(K) of the Act into one annual process.
                    In addition to the 5-year reviews, beginning for CY 2009, CMS and
                the RUC identified and reviewed a number of potentially misvalued codes
                on an annual basis based on various identification screens. This annual
                review of work and PE RVUs for potentially misvalued codes was
                supplemented by the amendments to section 1848 of the Act, as enacted
                by section 3134 of the Affordable Care Act, that require the agency to
                periodically identify, review and adjust values for potentially
                misvalued codes.
                e. Application of Budget Neutrality to Adjustments of RVUs
                    As described in section VII. of this final rule, the Regulatory
                Impact Analysis, in accordance with section 1848(c)(2)(B)(ii)(II) of
                the Act, if revisions to the RVUs cause expenditures for the year to
                change by more than $20 million, we make adjustments to ensure that
                expenditures do not increase or decrease by more than $20 million.
                2. Calculation of Payments Based on RVUs
                    To calculate the payment for each service, the components of the
                fee schedule (work, PE, and MP RVUs) are adjusted by geographic
                practice cost indices (GPCIs) to reflect the variations in the costs of
                furnishing the services. The GPCIs reflect the relative costs of work,
                PE, and MP in an area compared to the national average costs for each
                component. Please refer to the CY 2017 PFS final rule with comment
                period for a discussion of the last GPCI update (81 FR 80261 through
                80270), and to the GPCI section of this current rule for the CY 2020
                update.
                    RVUs are converted to dollar amounts through the application of a
                CF, which is calculated based on a statutory formula by CMS' Office of
                the Actuary (OACT). The formula for calculating the Medicare PFS
                payment amount for a given service and fee schedule area can be
                expressed as:
                Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU MP x GPCI
                MP)] x CF
                3. Separate Fee Schedule Methodology for Anesthesia Services
                    Section 1848(b)(2)(B) of the Act specifies that the fee schedule
                amounts for anesthesia services are to be based on a uniform relative
                value guide, with appropriate adjustment of an anesthesia CF, in a
                manner to ensure that fee schedule amounts for anesthesia services are
                consistent with those for other services of comparable value.
                Therefore, there is a separate fee schedule methodology for anesthesia
                services. Specifically, we establish a separate CF for anesthesia
                services and we utilize the uniform relative value guide, or base
                units, as well as time units, to calculate the fee schedule amounts for
                anesthesia services. Since anesthesia services are not valued using
                RVUs, a separate methodology for locality adjustments is also
                necessary. This involves an adjustment to the national anesthesia CF
                for each payment locality.
                B. Determination of PE RVUs
                1. Overview
                    Practice expense (PE) is the portion of the resources used in
                furnishing a service that reflects the general categories of physician
                and practitioner expenses, such as office rent and personnel wages, but
                excluding MP expenses, as specified in section 1848(c)(1)(B) of the
                Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a
                resource-based system for determining PE RVUs for each physicians'
                service. We develop PE RVUs by considering the direct and indirect
                practice resources involved in furnishing each service. Direct expense
                categories include clinical labor, medical supplies, and medical
                equipment. Indirect expenses include administrative labor, office
                expense, and all other expenses. The sections that follow provide more
                detailed information about the methodology for translating the
                resources involved in furnishing each service into service-specific PE
                RVUs. We refer readers to the CY 2010 PFS final rule with comment
                period (74 FR 61743 through 61748) for a more detailed explanation of
                the PE methodology.
                2. Practice Expense Methodology
                a. Direct Practice Expense
                    We determine the direct PE for a specific service by adding the
                costs of the direct resources (that is, the clinical staff, medical
                supplies, and medical equipment) typically involved with furnishing
                that service. The costs of the resources are calculated using the
                refined direct PE inputs assigned to each CPT code in our PE database,
                which are generally based on our review of recommendations received
                from the RUC and those provided in response to public comment periods.
                For a detailed explanation of the direct PE methodology, including
                examples, we refer readers to the 5-year review of work relative value
                units under the PFS and proposed changes to the PE
                [[Page 62572]]
                methodology CY 2007 PFS proposed notice (71 FR 37242) and the CY 2007
                PFS final rule with comment period (71 FR 69629).
                b. Indirect Practice Expense per Hour Data
                    We use survey data on indirect PEs incurred per hour worked, in
                developing the indirect portion of the PE RVUs. Prior to CY 2010, we
                primarily used the PE/HR by specialty that was obtained from the AMA's
                SMS. The AMA administered a new survey in CY 2007 and CY 2008, the
                Physician Practice Expense Information Survey (PPIS). The PPIS is a
                multispecialty, nationally representative, PE survey of both physicians
                and NPPs paid under the PFS using a survey instrument and methods
                highly consistent with those used for the SMS and the supplemental
                surveys. The PPIS gathered information from 3,656 respondents across 51
                physician specialty and health care professional groups. We believe the
                PPIS is the most comprehensive source of PE survey information
                available. We used the PPIS data to update the PE/HR data for the CY
                2010 PFS for almost all of the Medicare-recognized specialties that
                participated in the survey.
                    When we began using the PPIS data in CY 2010, we did not change the
                PE RVU methodology itself or the manner in which the PE/HR data are
                used in that methodology. We only updated the PE/HR data based on the
                new survey. Furthermore, as we explained in the CY 2010 PFS final rule
                with comment period (74 FR 61751), because of the magnitude of payment
                reductions for some specialties resulting from the use of the PPIS
                data, we transitioned its use over a 4-year period from the previous PE
                RVUs to the PE RVUs developed using the new PPIS data. As provided in
                the CY 2010 PFS final rule with comment period (74 FR 61751), the
                transition to the PPIS data was complete for CY 2013. Therefore, PE
                RVUs from CY 2013 forward are developed based entirely on the PPIS
                data, except as noted in this section.
                    Section 1848(c)(2)(H)(i) of the Act requires us to use the medical
                oncology supplemental survey data submitted in 2003 for oncology drug
                administration services. Therefore, the PE/HR for medical oncology,
                hematology, and hematology/oncology reflects the continued use of these
                supplemental survey data.
                    Supplemental survey data on independent labs from the College of
                American Pathologists were implemented for payments beginning in CY
                2005. Supplemental survey data from the National Coalition of Quality
                Diagnostic Imaging Services (NCQDIS), representing independent
                diagnostic testing facilities (IDTFs), were blended with supplementary
                survey data from the American College of Radiology (ACR) and
                implemented for payments beginning in CY 2007. Neither IDTFs, nor
                independent labs, participated in the PPIS. Therefore, we continue to
                use the PE/HR that was developed from their supplemental survey data.
                    Consistent with our past practice, the previous indirect PE/HR
                values from the supplemental surveys for these specialties were updated
                to CY 2006 using the Medicare Economic Index (MEI) to put them on a
                comparable basis with the PPIS data.
                    We also do not use the PPIS data for reproductive endocrinology and
                spine surgery since these specialties currently are not separately
                recognized by Medicare, nor do we have a method to blend the PPIS data
                with Medicare-recognized specialty data.
                    Previously, we established PE/HR values for various specialties
                without SMS or supplemental survey data by crosswalking them to other
                similar specialties to estimate a proxy PE/HR. For specialties that
                were part of the PPIS for which we previously used a crosswalked PE/HR,
                we instead used the PPIS-based PE/HR. We use crosswalks for specialties
                that did not participate in the PPIS. These crosswalks have been
                generally established through notice and comment rulemaking and are
                available in the file called ``CY 2020 PFS Proposed Rule PE/HR'' on the
                CMS website under downloads for the CY 2020 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    For CY 2020, we have incorporated the available utilization data
                for two new specialties, each of which became a recognized Medicare
                specialty during 2018. These specialties are Medical Toxicology and
                Hematopoietic Cell Transplantation and Cellular Therapy. We proposed to
                use proxy PE/HR values for these new specialties, as there are no PPIS
                data for these specialties, by crosswalking the PE/HR as follows from
                specialties that furnish similar services in the Medicare claims data:
                     Medical Toxicology from Emergency Medicine; and
                     Hematopoietic Cell Transplantation and Cellular Therapy
                from Hematology/Oncology.
                    These updates are reflected in the ``CY 2020 PFS Final Rule PE/HR''
                file available on the CMS website under the supporting data files for
                the CY 2020 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    We did not receive any public comments on the use of the proposed
                PE/HR proxy values for Medical Toxicology and Hematopoietic Cell
                Transplantation and Cellular Therapy. Therefore, we are finalizing our
                PE/HR crosswalks as proposed.
                c. Allocation of PE to Services
                    To establish PE RVUs for specific services, it is necessary to
                establish the direct and indirect PE associated with each service.
                (1) Direct Costs
                    The relative relationship between the direct cost portions of the
                PE RVUs for any two services is determined by the relative relationship
                between the sum of the direct cost resources (that is, the clinical
                staff, medical supplies, and medical equipment) typically involved with
                furnishing each of the services. The costs of these resources are
                calculated from the refined direct PE inputs in our PE database. For
                example, if one service has a direct cost sum of $400 from our PE
                database and another service has a direct cost sum of $200, the direct
                portion of the PE RVUs of the first service would be twice as much as
                the direct portion of the PE RVUs for the second service.
                (2) Indirect Costs
                    We allocate the indirect costs at the code level on the basis of
                the direct costs specifically associated with a code and the greater of
                either the clinical labor costs or the work RVUs. We also incorporate
                the survey data described earlier in the PE/HR discussion. The general
                approach to developing the indirect portion of the PE RVUs is as
                follows:
                     For a given service, we use the direct portion of the PE
                RVUs calculated as previously described and the average percentage that
                direct costs represent of total costs (based on survey data) across the
                specialties that furnish the service to determine an initial indirect
                allocator. That is, the initial indirect allocator is calculated so
                that the direct costs equal the average percentage of direct costs of
                those specialties furnishing the service. For example, if the direct
                portion of the PE RVUs for a given service is 2.00 and direct costs, on
                average, represent 25 percent of total costs for the specialties that
                furnish the service, the initial indirect allocator would be calculated
                so that it equals 75 percent of the total PE RVUs. Thus, in this
                example, the initial indirect allocator would equal 6.00, resulting in
                a total PE RVU of 8.00
                [[Page 62573]]
                (2.00 is 25 percent of 8.00 and 6.00 is 75 percent of 8.00).
                     Next, we add the greater of the work RVUs or clinical
                labor portion of the direct portion of the PE RVUs to this initial
                indirect allocator. In our example, if this service had a work RVU of
                4.00 and the clinical labor portion of the direct PE RVU was 1.50, we
                would add 4.00 (since the 4.00 work RVUs are greater than the 1.50
                clinical labor portion) to the initial indirect allocator of 6.00 to
                get an indirect allocator of 10.00. In the absence of any further use
                of the survey data, the relative relationship between the indirect cost
                portions of the PE RVUs for any two services would be determined by the
                relative relationship between these indirect cost allocators. For
                example, if one service had an indirect cost allocator of 10.00 and
                another service had an indirect cost allocator of 5.00, the indirect
                portion of the PE RVUs of the first service would be twice as great as
                the indirect portion of the PE RVUs for the second service.
                     Then, we incorporate the specialty-specific indirect PE/HR
                data into the calculation. In our example, if, based on the survey
                data, the average indirect cost of the specialties furnishing the first
                service with an allocator of 10.00 was half of the average indirect
                cost of the specialties furnishing the second service with an indirect
                allocator of 5.00, the indirect portion of the PE RVUs of the first
                service would be equal to that of the second service.
                (3) Facility and Nonfacility Costs
                    For procedures that can be furnished in a physician's office, as
                well as in a facility setting, where Medicare makes a separate payment
                to the facility for its costs in furnishing a service, we establish two
                PE RVUs: Facility and nonfacility. The methodology for calculating PE
                RVUs is the same for both the facility and nonfacility RVUs, but is
                applied independently to yield two separate PE RVUs. In calculating the
                PE RVUs for services furnished in a facility, we do not include
                resources that would generally not be provided by physicians when
                furnishing the service. For this reason, the facility PE RVUs are
                generally lower than the nonfacility PE RVUs.
                (4) Services With Technical Components and Professional Components
                    Diagnostic services are generally comprised of two components: A
                professional component (PC); and a technical component (TC). The PC and
                TC may be furnished independently or by different providers, or they
                may be furnished together as a global service. When services have
                separately billable PC and TC components, the payment for the global
                service equals the sum of the payment for the TC and PC. To achieve
                this, we use a weighted average of the ratio of indirect to direct
                costs across all the specialties that furnish the global service, TCs,
                and PCs; that is, we apply the same weighted average indirect
                percentage factor to allocate indirect expenses to the global service,
                PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum
                to the global.)
                (5) PE RVU Methodology
                    For a more detailed description of the PE RVU methodology, we refer
                readers to the CY 2010 PFS final rule with comment period (74 FR 61745
                through 61746). We also direct readers to the file called ``Calculation
                of PE RVUs under Methodology for Selected Codes'' which is available on
                our website under downloads for the CY 2020 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 File
                    First, we create a setup file for the PE methodology. The setup
                file contains the direct cost inputs, the utilization for each
                procedure code at the specialty and facility/nonfacility place of
                service level, and the specialty-specific PE/HR data calculated from
                the surveys.
                (b) Calculate the Direct Cost PE RVUs
                    Sum the costs of each direct input.
                    Step 1: Sum the direct costs of the inputs for each service.
                    Step 2: Calculate the aggregate pool of direct PE costs for the
                current year. We set the aggregate pool of PE costs equal to the
                product of the ratio of the current aggregate PE RVUs to current
                aggregate work RVUs and the projected aggregate work RVUs.
                    Step 3: Calculate the aggregate pool of direct PE costs for use in
                ratesetting. This is the product of the aggregate direct costs for all
                services from Step 1 and the utilization data for that service.
                    Step 4: Using the results of Step 2 and Step 3, use the CF to
                calculate a direct PE scaling adjustment to ensure that the aggregate
                pool of direct PE costs calculated in Step 3 does not vary from the
                aggregate pool of direct PE costs for the current year. Apply the
                scaling adjustment to the direct costs for each service (as calculated
                in Step 1).
                    Step 5: Convert the results of Step 4 to a RVU scale for each
                service. To do this, divide the results of Step 4 by the CF. Note that
                the actual value of the CF used in this calculation does not influence
                the final direct cost PE RVUs as long as the same CF is used in Step 4
                and Step 5. Different CFs would result in different direct PE scaling
                adjustments, but this has no effect on the final direct cost PE RVUs
                since changes in the CFs and changes in the associated direct scaling
                adjustments offset one another.
                (c) Create the Indirect Cost PE RVUs
                    Create indirect allocators.
                    Step 6: Based on the survey data, calculate direct and indirect PE
                percentages for each physician specialty.
                    Step 7: Calculate direct and indirect PE percentages at the service
                level by taking a weighted average of the results of Step 6 for the
                specialties that furnish the service. Note that for services with TCs
                and PCs, the direct and indirect percentages for a given service do not
                vary by the PC, TC, and global service.
                    We generally use an average of the 3 most recent years of available
                Medicare claims data to determine the specialty mix assigned to each
                code. Codes with low Medicare service volume require special attention
                since billing or enrollment irregularities for a given year can result
                in significant changes in specialty mix assignment. We finalized a
                policy in the CY 2018 PFS final rule (82 FR 52982 through 59283) to use
                the most recent year of claims data to determine which codes are low
                volume for the coming year (those that have fewer than 100 allowed
                services in the Medicare claims data). For codes that fall into this
                category, instead of assigning specialty mix based on the specialties
                of the practitioners reporting the services in the claims data, we
                instead use the expected specialty that we identify on a list developed
                based on medical review and input from expert stakeholders. We display
                this list of expected specialty assignments as part of the annual set
                of data files we make available as part of notice and comment
                rulemaking and consider recommendations from the RUC and other
                stakeholders on changes to this list on an annual basis. Services for
                which the specialty is automatically assigned based on previously
                finalized policies under our established methodology (for example,
                ``always therapy'' services) are unaffected by the list of expected
                specialty assignments. We also finalized in the CY 2018 PFS final rule
                (82 FR 52982 through 59283) a policy to apply these service-level
                overrides for both PE and MP, rather than one or the other category.
                [[Page 62574]]
                    For CY 2020, we proposed to clarify the expected specialty
                assignment for a series of cardiothoracic services. Prior to the
                creation of the expected specialty list for low volume services in CY
                2018, we previously finalized through rulemaking a crosswalk to the
                thoracic surgery specialty for a series of cardiothoracic services that
                typically had fewer than 100 services reported each year (see, for
                example, the CY 2012 PFS final rule (76 FR 73188-73189)). However, we
                noted that for many of the affected codes, the expected specialty list
                for low volume services incorrectly listed a crosswalk to the cardiac
                surgery specialty instead of the thoracic surgery specialty. We
                proposed to update the expected specialty list to accurately reflect
                the previously finalized crosswalk to thoracic surgery for these
                services. The affected codes are shown in Table 1.
                BILLING CODE 4120-01-P
                [[Page 62575]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.000
                BILLING CODE 4120-01-C
                    We note that the cardiac surgery and thoracic surgery specialties
                are similar to one another, sharing the same PE/HR data for PE
                valuation and nearly
                [[Page 62576]]
                identical MP risk factors for MP valuation. As a result, we noted that
                we did not anticipate the proposal having a discernible effect on the
                valuation of the codes listed above. The complete list of expected
                specialty assignments for individual low volume services, including the
                assignments for the codes identified in Table 1, is available on our
                website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    We received public comments on the proposed updates to the expected
                specialty list. The following is a summary of the comments we received
                and our responses.
                    Comment: Several commenters stated that CMS had indicated that the
                expected specialty would be updated to include a column specifying if a
                service was identified as a low volume service for CY 2020, indicating
                if the service-level override was being applied for CY 2020. However,
                commenters noted that this additional column did not appear in the
                download version and asked for additional information.
                    Response: We thank the commenters for identifying this missing
                information and we apologize for the technical oversight that caused
                this information not to be displayed for the proposed rule. We will
                include this additional column in the public use files released with
                the final rule.
                    Comment: Several commenters disagreed with the CMS proposal to
                update the expected specialty list to accurately reflect the previously
                finalized crosswalk to thoracic surgery for these services. Commenters
                stated that when the expected specialty list was developed, the
                affected specialties specifically selected the cardiac surgery
                specialty for these codes. Commenters also stated that, for nearly all
                of the applicable codes, cardiac surgery was the dominant provider in
                the 2018 Medicare claims data. Commenters acknowledged that the MP risk
                factor for both cardiac surgery and thoracic surgery is naturally very
                similar, but still asked that CMS assign the codes listed in Table 1 to
                the cardiac surgery specialty.
                    Response: As we stated in the proposed rule, we did not propose to
                assign the codes listed in Table 1 to the cardiac surgery specialty.
                Instead, we proposed to update the incorrect documentation in our
                expected specialty list to accurately reflect the previously finalized
                crosswalk to thoracic surgery for these services. The previously
                finalized assignment of the cardiac specialty to these services has
                been in place since the CY 2012 rule cycle, and we believe that the
                expected specialty list should be updated to reflect the correct
                specialty assignment.
                    Comment: Several commenters disagreed with the CMS methodology used
                to determine low volume service status; that is, codes that have fewer
                than 100 allowed services in the non-modified 3-year average of
                Medicare claims data. Commenters stated that utilization frequencies
                are adjusted in the RUC database for certain codes based on the CPT
                modifiers that were appended to the code to ensure that certain
                services are not over- or underweighted, such as changes made for
                bilateral modifier 50, post-op only modifier 55 and anesthesia
                modifiers QK, QX and QY. Commenters stated that CMS does not discount
                the utilization when determining what constitutes a low volume service
                and instead uses the non-modified 3-year service count for this
                criterion. Commenters stated that this could lead to double-counting
                and overestimating utilization for the purposes of determining low
                volume status, and requested that CMS use discounted utilization for
                this purpose.
                    Response: We disagree that it would be more accurate to use a
                discounted form of utilization to determine low volume status. We
                finalized a policy in the CY 2018 PFS final rule (82 FR 52982 through
                59283) to use claims data to determine which codes are low volume for
                the coming year, defining ``low volume'' as those that had fewer than
                100 allowed services in the Medicare claims data. We did not finalize a
                policy to discount this utilization and we do not believe that it would
                be more accurate to do so, as a service is still performed even if a
                payment discount is applied to its billing. More importantly, we did
                not make any proposals concerning the methodology to determine what
                constitute a low volume service in the proposed rule, and therefore, we
                are not finalizing any changes to this methodology.
                    Comment: One commenter provided a list of 112 additional codes that
                the commenter stated were low volume procedures, with an expected
                specialty for each code. The commenter recommended that CMS append this
                list to the anticipated specialty assignment for low volume services.
                Another commenter stated that gastroenterologists do not perform CPT
                code 96571 on a current basis, and recommended that CMS remove
                gastroenterology as the expected specialty for this code.
                    Response: We appreciate the list of additional services identified
                by the commenter. As we have stated in previous rulemaking (82 FR
                52982), we consider recommendations from the RUC and other stakeholders
                on changes to this list on an annual basis. In reviewing the submitted
                list of 112 additional codes, we noted that they generally fell into
                two categories--codes with a restricted coverage status code (``R'') or
                codes that exceed 100 services in the claims data, and therefore, did
                not meet our criteria for low volume status. We are finalizing the
                addition of these 112 codes to the low volume services list with the
                recommended expected specialty; however, we caution that many of these
                codes will continue to have utilization too high to meet the criteria
                for expected specialty assignment. We are adding these codes to the
                list in the interest of maintaining payment stability, such that, if
                they were to fall below 100 annual services at a future date, then an
                expected specialty would be assigned. We do not have indirect PE data
                for two of the specialties on the recommended list, and as a result we
                are substituting the established PE/HR crosswalk for these specialties.
                (The full list of all established PE/HR crosswalks is available on our
                website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.) The two
                affected specialties are Interventional Cardiology (crosswalked to
                Cardiology) and Surgical Oncology (crosswalked to General Surgery). We
                are also finalizing a change to the expected specialty for CPT code
                96571 in response to the information supplied by the commenter, which
                we are changing to Pulmonary Disease to match the dominant specialty in
                the claims data. The complete list of additional updates to the low
                volume services list is detailed in Table 2.
                BILLING CODE 4120-01-P
                [[Page 62577]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.001
                [[Page 62578]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.002
                BILLING CODE 4120-01-C
                    Comment: Several commenters stated that the non-facility PE RVUs
                for CPT code 55874 (Transperineal placement of biodegradable material,
                peri-prostatic, single or multiple injection(s), including image
                guidance, when performed) are projected to decrease 13 percent for CY
                2020, which the commenter believed to be attributed to the current
                specialty mix utilizing the code. The commenters stated that the
                projected decrease for CY 2020 was due to CMS using the first year of
                actual claims data, which had a different ratio of the urology and
                radiation oncology specialties than in the previously projected
                utilization crosswalk. The commenters requested that CMS address the
                proposed decreases for CPT code 55874 in the final rule.
                    Response: We agree with the commenters that the proposed decreases
                for CPT code 55874 were due to changes in the specialty mix, as the
                code shifted from projected utilization to reported claims data.
                However, we do not agree with the commenters that there is a need to
                address the valuation of this code, as we believe that it is important
                to use actual claims data as opposed to utilization projections once
                the data for new codes has become available. The specialty mix on
                reported claims will necessarily be more accurate than the utilization
                projections created in advance before claims data exists. We also note
                that the specialty mix associated with CPT code 55874 in the claims
                data is unrelated to the low volume list or the assignment of an
                expected specialty.
                    Comment: A commenter stated that CPT codes 33271 (Insertion of
                subcutaneous implantable defibrillator electrode) and 33273
                (Repositioning of previously implanted subcutaneous implantable
                defibrillator electrode) are low volume service codes that are proposed
                to have a service-level override to the anticipated specialty of
                cardiology. The commenter supported this expected specialty assignment.
                    Response: We appreciate the support for our proposals from the
                commenter.
                    After consideration of the public comments, we are finalizing our
                proposal to update the expected specialty list to accurately reflect
                the previously finalized crosswalk to thoracic surgery for these
                services. We are also finalizing the updates to the expected specialty
                list detailed above in Table 2; we reiterate again that we do not
                anticipate this finalized proposal having a discernible effect on the
                valuation of the codes in the table due to the similarity between the
                cardiac surgery and thoracic surgery specialties.
                    Step 8: Calculate the service level allocators for the indirect PEs
                based on the percentages calculated in Step 7. The indirect PEs are
                allocated based on the three components: The direct PE RVUs; the
                clinical labor PE RVUs; and the work RVUs.
                    For most services the indirect allocator is: Indirect PE percentage
                * (direct PE RVUs/direct percentage) + work RVUs.
                    There are two situations where this formula is modified:
                     If the service is a global service (that is, a service
                with global, professional, and technical components), then the indirect
                PE allocator is: Indirect percentage (direct PE RVUs/direct percentage)
                + clinical labor PE RVUs + work RVUs.
                     If the clinical labor PE RVUs exceed the work RVUs (and
                the service is not a global service), then the indirect allocator is:
                Indirect PE percentage (direct PE RVUs/direct percentage) + clinical
                labor PE RVUs.
                    (Note: For global services, the indirect PE allocator is based on
                both the work RVUs and the clinical labor PE RVUs. We do this to
                recognize that, for the PC service, indirect PEs would be allocated
                using the work RVUs, and for the TC service, indirect PEs would be
                allocated using the direct PE RVUs and the clinical labor PE RVUs. This
                also allows the global component RVUs to equal the sum of the PC and TC
                RVUs.)
                    For presentation purposes, in the examples in the download file
                called ``Calculation of PE RVUs under Methodology for Selected Codes'',
                the formulas were divided into two parts for each service.
                     The first part does not vary by service and is the
                indirect percentage (direct PE RVUs/direct percentage).
                     The second part is either the work RVU, clinical labor PE
                RVU, or both depending on whether the service is a global service and
                whether the clinical PE RVUs exceed the work RVUs (as described earlier
                in this step).
                    Apply a scaling adjustment to the indirect allocators.
                    Step 9: Calculate the current aggregate pool of indirect PE RVUs by
                multiplying the result of step 8 by the average indirect PE percentage
                from the survey data.
                    Step 10: Calculate an aggregate pool of indirect PE RVUs for all
                PFS services by adding the product of the indirect PE allocators for a
                service from Step 8 and the utilization data for that service.
                    Step 11: Using the results of Step 9 and Step 10, calculate an
                indirect PE adjustment so that the aggregate indirect allocation does
                not exceed the available aggregate indirect PE RVUs and apply it to
                indirect allocators calculated in Step 8.
                    Calculate the indirect practice cost index.
                    Step 12: Using the results of Step 11, calculate aggregate pools of
                specialty-specific adjusted indirect PE allocators
                [[Page 62579]]
                for all PFS services for a specialty by adding the product of the
                adjusted indirect PE allocator for each service and the utilization
                data for that service.
                    Step 13: Using the specialty-specific indirect PE/HR data,
                calculate specialty-specific aggregate pools of indirect PE for all PFS
                services for that specialty by adding the product of the indirect PE/HR
                for the specialty, the work time for the service, and the specialty's
                utilization for the service across all services furnished by the
                specialty.
                    Step 14: Using the results of Step 12 and Step 13, calculate the
                specialty-specific indirect PE scaling factors.
                    Step 15: Using the results of Step 14, calculate an indirect
                practice cost index at the specialty level by dividing each specialty-
                specific indirect scaling factor by the average indirect scaling factor
                for the entire PFS.
                    Step 16: Calculate the indirect practice cost index at the service
                level to ensure the capture of all indirect costs. Calculate a weighted
                average of the practice cost index values for the specialties that
                furnish the service. (Note: For services with TCs and PCs, we calculate
                the indirect practice cost index across the global service, PCs, and
                TCs. Under this method, the indirect practice cost index for a given
                service (for example, echocardiogram) does not vary by the PC, TC, and
                global service.)
                    Step 17: Apply the service level indirect practice cost index
                calculated in Step 16 to the service level adjusted indirect allocators
                calculated in Step 11 to get the indirect PE RVUs.
                (d) Calculate the Final PE RVUs
                    Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs
                from Step 17 and apply the final PE budget neutrality (BN) adjustment.
                The final PE BN adjustment is calculated by comparing the sum of steps
                5 and 17 to the proposed 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 budget neutrality. (See ``Specialties excluded from
                ratesetting calculation'' later in this final rule.)
                    Step 19: Apply the phase-in of significant RVU reductions and its
                associated adjustment. Section 1848(c)(7) of the Act specifies that for
                services that are not new or revised codes, if the total RVUs for a
                service for a year would otherwise be decreased by an estimated 20
                percent or more as compared to the total RVUs for the previous year,
                the applicable adjustments in work, PE, and MP RVUs shall be phased in
                over a 2-year period. In implementing the phase-in, we consider a 19
                percent reduction as the maximum 1-year reduction for any service not
                described by a new or revised code. This approach limits the year one
                reduction for the service to the maximum allowed amount (that is, 19
                percent), and then phases in the remainder of the reduction. To comply
                with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure
                that the total RVUs for all services that are not new or revised codes
                decrease by no more than 19 percent, and then apply a relativity
                adjustment to ensure that the total pool of aggregate PE RVUs remains
                relative to the pool of work and MP RVUs. For a more detailed
                description of the methodology for the phase-in of significant RVU
                changes, we refer readers to the CY 2016 PFS final rule with comment
                period (80 FR 70927 through 70931).
                (e) Setup File Information
                     Specialties excluded from ratesetting calculation: For the
                purposes of calculating the PE and MP RVUs, we exclude certain
                specialties, such as certain NPPs paid at a percentage of the PFS and
                low-volume specialties, from the calculation. These specialties are
                included for the purposes of calculating the BN adjustment. They are
                displayed in Table 2.
                [[Page 62580]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.003
                     Crosswalk certain low volume physician specialties:
                Crosswalk the utilization of certain specialties with relatively low
                PFS utilization to the associated specialties.
                     Physical therapy utilization: Crosswalk the utilization
                associated with all physical therapy services to the specialty of
                physical therapy.
                     Identify professional and technical services not
                identified under the usual TC and 26 modifiers: Flag the services that
                are PC and TC services but do not use TC and 26 modifiers (for example,
                electrocardiograms). This flag associates the PC and TC with the
                associated global code for use in creating the indirect PE RVUs. For
                example, the professional service, CPT code 93010 (Electrocardiogram,
                routine ECG with at least 12 leads; interpretation and report only), is
                associated with the global service, CPT code 93000 (Electrocardiogram,
                routine ECG with at least 12 leads; with interpretation and report).
                     Payment modifiers: Payment modifiers are accounted for in
                the creation of the file consistent with current payment policy as
                implemented in claims processing. For example, services billed with the
                assistant at surgery modifier are paid 16 percent of the PFS amount for
                that service; therefore, the utilization file is modified to only
                account for 16 percent of any service that contains the assistant at
                surgery modifier. Similarly, for those services to which volume
                adjustments are made to account for the payment modifiers, time
                adjustments are applied as well. For time adjustments to surgical
                services, the intraoperative portion in the work time file is used;
                where it is not present, the intraoperative percentage from the payment
                files used by contractors to process Medicare claims is used instead.
                Where neither is available, we use the payment adjustment ratio to
                adjust the time
                [[Page 62581]]
                accordingly. Table 4 details the manner in which the modifiers are
                applied.
                [GRAPHIC] [TIFF OMITTED] TR15NO19.004
                    We also make adjustments to volume and time that correspond to
                other payment rules, including special multiple procedure endoscopy
                rules and multiple procedure payment reductions (MPPRs). We note that
                section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments
                for multiple imaging procedures and multiple therapy services from the
                BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These
                MPPRs are not included in the development of the RVUs.
                    For anesthesia services, we do not apply adjustments to volume
                since we use the average allowed charge when simulating RVUs;
                therefore, the RVUs as calculated already reflect the payments as
                adjusted by modifiers, and no volume adjustments are necessary.
                However, a time adjustment of 33 percent is made only for medical
                direction of two to four cases since that is the only situation where a
                single practitioner is involved with multiple beneficiaries
                concurrently, so that counting each service without regard to the
                overlap with other services would overstate the amount of time spent by
                the practitioner furnishing these services.
                     Work RVUs: The setup file contains the work RVUs from this
                final rule.
                (6) Equipment Cost per Minute
                    The equipment cost per minute is calculated as:
                (1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 +
                interest rate) [caret] life of equipment)))) + maintenance)
                Where:
                minutes per year = maximum minutes per year if usage were continuous
                (that is, usage = 1); generally 150,000 minutes.
                usage = variable, see discussion below in this final rule.
                price = price of the particular piece of equipment.
                life of equipment = useful life of the particular piece of
                equipment.
                maintenance = factor for maintenance; 0.05.
                interest rate = variable, see discussion below in this final rule.
                    Usage: We currently use an equipment utilization rate assumption of
                50 percent for most equipment, with the exception of expensive
                diagnostic imaging equipment, for which we use a 90 percent assumption
                as required by section 1848(b)(4)(C) of the Act.
                    Stakeholders have often suggested that particular equipment items
                are used less frequently than 50 percent of the time in the typical
                setting and that CMS should reduce the equipment utilization rate based
                on these recommendations. We appreciate and share stakeholders'
                interest in using the most accurate assumption regarding the equipment
                utilization rate for particular equipment items. However, we believe
                that absent robust, objective, auditable data regarding the use of
                particular items, the 50 percent assumption is the most appropriate
                within the relative value system.
                    Comment: A commenter stated that they disagreed with the 90 percent
                utilization metric for CT and MRI equipment, as the commenter did not
                believe it to be realistic in a typical outpatient imaging setting, but
                the commenter recognized that the percentage is dictated by statute.
                The commenter stated that the 90 percent equipment usage assumption for
                CT and MRI is inconsistent with actual imaging center practice and
                ignores scheduling in the ``real world,'' such as lunch and other
                mandated breaks, complicated patients, and downtime for maintenance and
                quality control. The commenter stated that to achieve a 90 percent
                utilization rate under ideal conditions would require two employees per
                unit; one doing pre-service tasks while the other is setting up the
                machine as opposed to assumptions of one CT or MRI technologist per
                scanner.
                    Response: We disagree with the commenters regarding the equipment
                time assigned to highly technical equipment such as CT or MRI machines.
                We continue to believe that certain highly technical pieces of
                equipment
                [[Page 62582]]
                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 and are typically available for other patients
                even when one member of clinical staff may be occupied with a
                preservice or postservice task related to the procedure. For a more
                detailed description of this topic, we refer readers to the CY 2015 PFS
                final rule with comment period (79 FR 67639 through 67640).
                    Comment: One commenter stated that most ophthalmology diagnostic
                equipment is in use far less than 50 percent of the time. The commenter
                indicated that they had developed a survey instrument that asked
                ophthalmic technicians to provide time usage estimates for the 16 most-
                utilized pieces of diagnostic testing equipment. The commenter stated
                that their preliminary survey results produced a utilization rate of 22
                percent, much lower than the 50 percent assumption currently used by
                CMS. The commenter suggested that CMS should work with the RUC to do a
                robust survey to help determine a more valid utilization rate,
                including the possibility of specialty-specific equipment utilization
                rates. The commenter also requested a meeting to discuss what options
                CMS would find acceptable in undertaking their own survey for
                ophthalmology services.
                    Response: We are always looking for more accurate information to
                improve our PE methodology. We appreciate and share stakeholders'
                interest in using the most accurate assumption regarding the equipment
                utilization rate for particular equipment items, and we will review any
                information that the RUC's PE subcommittee or other stakeholders are
                willing to submit through the public comment process. We concur with
                the commenter that a wide-ranging survey or similar study designed to
                address the subject of equipment utilization rates would be an
                appropriate tool to investigate this subject in further detail. At the
                moment, we believe that absent robust, objective, auditable data
                regarding the use of particular items, the 50 percent assumption is the
                most appropriate within the relative value system. We welcome further
                submission of data that illustrates an alternative rate.
                    Maintenance: This factor for maintenance was finalized 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
                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 do not believe that 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 noted that we did
                not believe that we have sufficient information at present to do so. We
                continue to investigate potential avenues for determining equipment
                maintenance costs across a broad range of equipment items.
                    Comment: A commenter stated that they continue to believe that
                maintenance costs for imaging equipment are much higher than the
                current 5 percent assumption. The commenter stated that the maintenance
                costs for an MRI unit include servicing the scanner itself plus
                replacing cryogens for a cost well in excess of 5 percent even using
                CMS' low assumptions of MRI and CT room cost.
                    Response: As detailed above, we continue to believe that the
                current 5 percent maintenance factor likely understates the true cost
                of maintaining some equipment and overstates the maintenance costs for
                other equipment. We continue at this time to lack publicly available
                datasets regarding equipment maintenance costs or another systematic
                data collection methodology for determining maintenance factor. We
                remind readers that 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.
                    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). We
                did not propose any changes to these interest rates for CY 2020. The
                Interest rates are listed in Table 5.
                [GRAPHIC] [TIFF OMITTED] TR15NO19.005
                    Comment: A commenter stated that they did not support the continued
                use of the 2012 SBA maximum interest rates, which the commenter stated
                are significantly lower than the 2019 rates. The commenter stated that
                CMS should also update the interest rates used to calculate PE RVUs for
                such items based on current SBA data.
                    Response: We appreciate the additional information regarding SBA
                [[Page 62583]]
                maximum interest rates from the commenter. However, we did not propose
                any changes to these interest rates for CY 2020; we will consider
                potential changes to the interest rates used in the equipment cost per
                minute calculation for possible future rulemaking.
                3. Changes to Direct PE Inputs for Specific Services
                    This section focuses on specific PE inputs. The direct PE inputs
                are included in the CY 2020 direct PE input public use files, which are
                available on the CMS website under downloads for the CY 2020 PFS final
                rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                a. Standardization of Clinical Labor Tasks
                    As we noted in the CY 2015 PFS final rule with comment period (79
                FR 67640-67641), 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
                postservice 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.'' 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 clinical labor tasks
                associated with pathology services in the CY 2016 PFS final rule with
                comment period (80 FR 70902) at 4 minutes for ``Accession specimen/
                prepare for examination'', 0.5 minutes for ``Assemble and deliver
                slides with paperwork to pathologists'', 0.5 minutes for ``Assemble
                other light microscopy slides, open nerve biopsy slides, and clinical
                history, and present to pathologist to prepare clinical pathologic
                interpretation'', 1 minute for ``Clean room/equipment following
                procedure'', 1 minute for ``Dispose of remaining specimens, spent
                chemicals/other consumables, and hazardous waste'', and 1 minute for
                ``Prepare, pack and transport specimens and records for in-house
                storage and external storage (where applicable).'' We do not believe
                these activities would be dependent on number of blocks or batch size,
                and we believe that these values accurately reflect the typical time it
                takes to perform these clinical labor tasks.
                    In reviewing the RUC-recommended direct PE inputs for CY 2019, we
                noticed that the 3 minutes of clinical labor time traditionally
                assigned to the ``Prepare room, equipment and supplies'' (CA013)
                clinical labor activity were split into 2 minutes for the ``Prepare
                room, equipment and supplies'' activity and 1 minute for the ``Confirm
                order, protocol exam'' (CA014) activity. We proposed to maintain the 3
                minutes of clinical labor time for the ``Prepare room, equipment and
                supplies'' activity and remove the clinical labor time for the
                ``Confirm order, protocol exam'' activity wherever we observed this
                pattern in the RUC-recommended direct PE inputs. Commenters explained
                in response that when the new version of the PE worksheet introduced
                the activity codes for clinical labor, there was a need to translate
                old clinical labor tasks into the new activity codes, and that a prior
                clinical labor task was split into two of the new clinical labor
                activity codes: CA007 (``Review patient clinical extant information and
                questionnaire'') in the preservice period, and CA014 (``Confirm order,
                protocol exam'') in the service period. Commenters stated that the same
                clinical labor from the old PE worksheet was now divided into the CA007
                and CA014 activity codes, with a standard of 1 minute for each
                activity. We agreed with commenters that we would finalize the RUC-
                recommended 2 minutes of clinical labor time for the CA007 activity
                code and 1 minute for the CA014 activity code in situations where this
                was the case. However, when reviewing the clinical labor for the
                reviewed codes affected by this issue, we found that several of the
                codes did not include this old clinical labor task, and we also noted
                that several of the reviewed codes that contained the CA014 clinical
                labor activity code did not contain any clinical labor for the CA007
                activity. In these situations, we continue to believe that in these
                cases the 3 total minutes of clinical staff time would be more
                accurately described by the CA013 ``Prepare room, equipment and
                supplies'' activity code, and we finalized these clinical labor
                refinements. For additional details, we direct readers to the
                discussion in the CY 2019 PFS final rule (83 FR 59463 and 59464).
                    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
                [[Page 62584]]
                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 2020, 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 2020 PFS final rule at
                http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    Comment: A commenter wrote to express their concerns with the
                manner in which data was displayed in the Proposed CY 2020 Direct PE
                Refinements table in the proposed rule (84 FR 40623-40666),
                specifically the common refinements to equipment time. The commenter
                stated that nearly 64 percent of the total PE refinements were related
                to equipment, and 59 percent of these refinements were listed as ``E15:
                Refined equipment time to conform to changes in clinical labor time.''
                The commenter stated that they did not agree that these are separate
                refinements; rather, they are the formulaic result of the applying
                refinements to the clinical labor time. The commenter stated that
                including these instances as refinements adds a large quantity of rows
                to the PE refinement table and gives the impression that there are
                major inaccuracies in the RUC PE recommendations. The commenter
                provided an example of a single clinical labor refinement to a code
                family creating 32 rows of subsequent equipment refinements, and
                contended that articulating these edits was not necessary as they do
                not reflect either an error or a policy discrepancy with the RUC. The
                commenter requested that CMS no longer include refinements based on
                ``E15: Refined equipment time to conform to changes in clinical labor
                time'' in the refinement table of the proposed rule.
                    Response: We agree with the commenter that these equipment time
                refinements generated in response to clinical labor time refinements
                are indeed the result of applying standard equipment time formulas, and
                they do not reflect errors in the equipment recommendations or policy
                discrepancies with the RUC. We also agree that these refinements add a
                significant number of rows to the table of direct PE refinements.
                However, we disagree with the commenter on the subject of whether these
                constitute separate refinements, and we believe that it is important to
                publish the specific equipment times that we are proposing (or
                finalizing in the case of the final rule) when they differ from the
                recommended values. We include the direct cost change in dollars
                resulting from our PE refinements on the aforementioned table, and if
                we were to avoid including these equipment refinements, it would not
                always be clear what effect they were having on the direct costs for
                the procedure. For example, a modest reduction of a few minutes in
                clinical labor time can result in a substantial decrease in direct
                costs for procedures that employ highly expensive equipment. We believe
                that it is more important to provide additional transparency regarding
                the changes in direct costs resulting from our equipment time
                refinements so that the public can better comment on our proposals, as
                opposed to limiting the total number of printed equipment refinements.
                    However, we agree with the commenter that the information displayed
                in the table of direct PE refinements can be confusing and
                overwhelming, and we believe that it could potentially be provided to
                the public in a more useful fashion. For this CY PFS 2020 final rule,
                we will separate out the ``E15: Refined equipment time to conform to
                changes in clinical labor time'' direct PE refinements and print them
                in a separate table of refinements. We believe that this will help to
                address the issues raised by the commenter while also retaining all of
                the data included in previous rules. We refer readers to Table 28 in
                section II.N. of this final rule, the Valuation of Specific Codes
                section, for additional details.
                b. Equipment Recommendations for Scope Systems
                    During our routine reviews of direct PE input recommendations, we
                have regularly found unexplained inconsistencies involving the use of
                scopes and the video systems associated with them. Some of the scopes
                include video systems bundled into the equipment item, some of them
                include scope accessories as part of their price, and some of them are
                standalone scopes with no other equipment included. It is not always
                clear which equipment items related to scopes fall into which of these
                categories. We have also frequently found anomalies in the equipment
                recommendations, with equipment items that consist of a scope and video
                system bundle recommended, along with a separate scope video system.
                Based on our review, the variations do not appear to be consistent with
                the different code descriptions.
                    To promote appropriate relativity among the services and facilitate
                the transparency of our review process, during the review of the
                recommended direct PE inputs for the CY 2017 PFS proposed rule, we
                developed a structure that separates the scope, the associated video
                system, and any scope accessories that might be typical as distinct
                equipment items for each code. Under this approach, we proposed
                standalone prices for each scope, and separate prices for the video
                systems and accessories that are used with scopes.
                (1) Scope Equipment
                    Beginning in the CY 2017 PFS proposed rule (81 FR 46176 through
                46177), we proposed standardizing refinements to the way scopes have
                been defined in the direct PE input database. We believe that there are
                four general types of scopes: Non-video scopes; flexible scopes; semi-
                rigid scopes, and rigid scopes. Flexible scopes, semi-rigid scopes, and
                rigid scopes would typically be paired with one of the scope video
                systems, while the non-video scopes would not. The flexible scopes can
                be further divided into diagnostic (or non-channeled) and therapeutic
                (or channeled) scopes. We proposed to identify for each anatomical
                application: (1) A rigid scope; (2) a semi-rigid scope; (3) a non-video
                flexible scope; (4) a non-channeled flexible video scope; and (5) a
                channeled flexible video scope. We proposed to classify the existing
                scopes in our direct PE database under this classification system, to
                improve the transparency of our review process and improve appropriate
                relativity among the services. We planned to propose input prices for
                these equipment items through future rulemaking.
                    We proposed these changes only for the reviewed codes for CY 2017
                that made use of scopes, along with updated prices for the equipment
                items related to scopes utilized by these services. We did not propose
                to apply these policies
                [[Page 62585]]
                to codes with inputs reviewed prior to CY 2017. We also solicited
                comment on this separate pricing structure for scopes, scope video
                systems, and scope accessories, which we noted we could consider
                proposing to apply to other codes in future rulemaking. We did not
                finalize price increases for a series of other scopes and scope
                accessories, as the invoices submitted for these components indicated
                that they are different forms of equipment with different product IDs
                and different prices. We did not receive any data to indicate that the
                equipment on the newly submitted invoices was more typical in its use
                than the equipment that we were currently using for pricing.
                    We did not make further changes to existing scope equipment in CY
                2017 to allow the RUC's PE Subcommittee the opportunity to provide
                feedback. However, we believed there was some miscommunication on this
                point, as the RUC's PE Subcommittee workgroup that was created to
                address scope systems stated that no further action was required
                following the finalization of our proposal. Therefore, we made further
                proposals in the CY 2018 PFS proposed rule (82 FR 33961 through 33962)
                to continue clarifying scope equipment inputs, and sought comments
                regarding the new set of scope proposals. We considered creating a
                single scope equipment code for each of the five categories detailed in
                this rule: (1) A rigid scope; (2) a semi-rigid scope; (3) a non-video
                flexible scope; (4) a non-channeled flexible video scope; and (5) a
                channeled flexible video scope. Under the current classification
                system, there are many different scopes in each category depending on
                the medical specialty furnishing the service and the part of the body
                affected. We stated our belief that the variation between these scopes
                was not significant enough to warrant maintaining these distinctions,
                and we believed that creating and pricing a single scope equipment code
                for each category would help provide additional clarity. We sought
                public comment on the merits of this potential scope organization, as
                well as any pricing information regarding these five new scope
                categories.
                    After considering the comments on the CY 2018 PFS proposed rule, we
                did not finalize our proposal to create and price a single scope
                equipment code for each of the five categories previously identified.
                Instead, we supported the recommendation from the commenters to create
                scope equipment codes on a per-specialty basis for six categories of
                scopes as applicable, including the addition of a new sixth category of
                multi-channeled flexible video scopes. Our goal was to create an
                administratively simple scheme that would be easier to maintain and
                help to reduce administrative burden. In 2018, the RUC convened a Scope
                Equipment Reorganization Workgroup to incorporate feedback from expert
                stakeholders with the intention of making recommendations to us on
                scope organization and scope pricing. Since the workgroup was not
                convened in time to submit recommendations for the CY 2019 PFS
                rulemaking cycle, we delayed proposals for any further changes to scope
                equipment until CY 2020 in order to incorporate the feedback from the
                aforementioned workgroup.
                (2) Scope Video System
                    We proposed in the CY 2017 PFS proposed rule (81 FR 46176 through
                46177) to define the scope video system as including: (1) A monitor;
                (2) a processor; (3) a form of digital capture; (4) a cart; and (5) a
                printer. We believe that these equipment components represent the
                typical case for a scope video system. Our model for this system was
                the ``video system, endoscopy (processor, digital capture, monitor,
                printer, cart)'' equipment item (ES031), which we proposed to re-price
                as part of this separate pricing approach. We obtained current pricing
                invoices for the endoscopy video system as part of our investigation of
                these issues involving scopes, which we proposed to use for this re-
                pricing. In response to comments, we finalized the addition of a
                digital capture device to the endoscopy video system (ES031) in the CY
                2017 PFS final rule (81 FR 80188). We finalized our proposal to price
                the system at $33,391, based on component prices of $9,000 for the
                processor, $18,346 for the digital capture device, $2,000 for the
                monitor, $2,295 for the printer, and $1,750 for the cart. In the CY
                2018 PFS final rule (82 FR 52991 through 52993), we outlined, but did
                not finalize, a proposal to add an LED light source into the cost of
                the scope video system (ES031), which would remove the need for a
                separate light source in these procedures. We also described a proposal
                to increase the price of the scope video system by $1,000 to cover the
                expense of miscellaneous small equipment associated with the system
                that falls below the threshold of individual equipment pricing as scope
                accessories (such as cables, microphones, foot pedals, etc.). With the
                addition of the LED light (equipment code EQ382 at a price of $1,915),
                the updated total price of the scope video system would be set at
                $36,306.
                    We did not finalize this updated pricing to the scope video system
                in CY 2018, but we did propose and finalize the updated pricing for CY
                2019 to $36,306 along with changing the name of the ES031 equipment
                item to ``scope video system (monitor, processor, digital capture,
                cart, printer, LED light)'' to reflect the fact that the use of the
                ES031 scope video system is not limited to endoscopy procedures.
                (3) Scope Accessories
                    We understand that there may be other accessories associated with
                the use of scopes. We finalized a proposal in the CY 2017 PFS final
                rule (81 FR 80188) to separately price any scope accessories outside
                the use of the scope video system, and individually evaluate their
                inclusion or exclusion as direct PE inputs for particular codes as
                usual under our current policy based on whether they are typically used
                in furnishing the services described by the particular codes.
                (4) Scope Proposals for CY 2020
                    The Scope Equipment Reorganization Workgroup organized by the RUC
                submitted detailed recommendations to CMS for consideration in the CY
                2020 rule cycle, describing 23 different types of scope equipment, the
                HCPCS codes associated with each scope type, and a series of invoices
                for scope pricing. We appreciate the information provided by the
                workgroup and continue to welcome additional comments and feedback from
                stakeholders. Based on the recommendations from the workgroup, we
                proposed to establish 23 new scope equipment codes as detailed in Table
                6.
                [[Page 62586]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.006
                    We note that we did not receive invoices for many of the new scope
                equipment items. There also was some inconsistency in the workgroup
                recommendations regarding the non-channeled flexible digital scope,
                laryngoscopy (ES080) equipment item and the non-video flexible scope,
                laryngoscopy (ES092) equipment item. These scopes were listed as a
                single equipment item in some of the workgroup materials and listed as
                separate equipment items in other materials. We proposed to establish
                them as separate equipment items based on the submitted invoices, which
                demonstrated that these were two different types of scopes with
                distinct price points of approximately $17,000 and $5,000 respectively.
                    We noted a similar issue with the submitted invoices for the rigid
                scope, laryngoscopy (ES075) equipment item. Among the eight total
                invoices, five of them were clustered around a price point of
                approximately $4,000 while the other three invoices had prices of
                roughly $15,000 apiece. The invoices indicated that these prices came
                from two distinct types of equipment, and as a result we proposed to
                consider these items separately. We proposed to use the initial five
                invoices to establish a proposed price of $3,966.08 for the rigid
                scope, laryngoscopy (ES075) equipment item. We noted that this is a
                close match for the current price of $3,178.08 used by the endoscope,
                rigid, laryngoscopy (ES010) equipment, which is the closest equivalent
                scope equipment. We also noted that the other three invoices appear to
                describe a type of stroboscopy system rather than a scope, and they
                have an average price of $14,737. This is a reasonably close match for
                the price of our current stroboscoby system (ES065) equipment, which
                has a CY 2020 price of $17,950.28 as it transitions to a final CY 2022
                destination price of $16,843.87 (see the 4-year pricing transition of
                the market-based supply and equipment pricing update discussed later in
                this section for more information). We stated that we believe that
                these invoices reinforce the value established by the market-based
                pricing update for the stroboscoby system carried out last year, and we
                did not propose to update the price of the ES065 equipment. We also
                noted that we were open to feedback from stakeholders if they believe
                it would be more accurate to assign a price of $14,737 to the
                stroboscoby system based on these invoice submissions, as opposed to
                maintaining the current pricing transition to a CY 2022 price of
                $16,843.87.
                    For the eight new scope equipment items where we received submitted
                invoices for pricing, we proposed to replace the existing scopes with
                the new scope equipment. We noted that we received recommendations from
                the RUC's scope workgroup regarding which HCPCS codes make use of the
                new scope equipment items, and we proposed to make this scope
                replacement for approximately 100 HCPCS codes in total (see Table 7).
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                    In all but three cases (as identified with an asterisk (*) in Table
                7), we proposed for the new scope equipment item to replace the
                existing scope with the identical amount of equipment time. For CPT
                codes 92612 (Flexible endoscopic evaluation of swallowing by cine or
                video recording), 92614 (Flexible endoscopic evaluation, laryngeal
                sensory testing by cine or video recording), and 92616 (Flexible
                endoscopic evaluation of swallowing and laryngeal sensory testing by
                cine or video recording), we noted the current scopes in use are the
                FEES video system
                [[Page 62591]]
                (ES027) and the FEESST video system (ES028). Since we proposed the use
                of a non-channeled flexible digital scope that requires a corresponding
                scope video system, we also proposed to add the ES080 equipment at the
                same equipment time to these three procedures rather than replacing the
                ES027 and ES028 equipment. In all other cases, we proposed to replace
                the current scope equipment listed in Table 7 with the new scope
                equipment, while maintaining the same amount of equipment time.
                    We identified inconsistencies with the workgroup recommendations
                for a small number of HCPCS codes. CPT code 45350 (Sigmoidoscopy,
                flexible; with band ligation(s) (e.g., hemorrhoids)) was recommended to
                include a multi-channeled flexible digital scope, flexible
                sigmoidoscopy (ES085); however, we noted that this CPT code does not
                include any scopes among its current direct PE inputs. CPT code 31595
                was recommended to include a non-channeled flexible digital scope,
                laryngoscopy (ES080) but it no longer exists as a CPT code after having
                been deleted for CY 2019. CPT code 43232 (Esophagoscopy, flexible,
                transoral; with transendoscopic ultrasound-guided intramural or
                transmural fine needle aspiration/biopsy(s)) was recommended to include
                a multi-channeled flexible digital scope, esophagoscopy (ES088), but it
                does not include a scope amongst its direct PE inputs any longer
                following clarification from the same workgroup recommendations that
                CPT code 43232 is never performed in the nonfacility setting. In all
                three of these cases, we did not propose to add one of the new scope
                equipment items to these procedures.
                    We noted that we did not receive pricing information along with the
                workgroup recommendations for the other 15 new scope equipment items.
                Therefore, we proposed to establish new equipment codes for these
                scopes as detailed in Table 6. However, we noted that due to a lack of
                pricing information, we did not propose to replace existing scope
                equipment with the new equipment items as we did for the other eight
                new scope equipment items for CY 2020. We welcomed additional feedback
                from stakeholders regarding the pricing of these scope equipment items,
                especially the submission of detailed invoices with pricing data. We
                proposed to transition the scopes for which we did have pricing
                information over to the new equipment items for CY 2020, and we noted
                that we looked forward to engaging with stakeholders to assist in
                pricing and then transitioning the remaining scopes in future
                rulemaking.
                    We received public comments on our scope equipment proposals. The
                following is a summary of the comments we received and our responses.
                    Comment: Several commenters stated that they appreciated the
                proposal of the recommended 23 new scope equipment codes and the
                proposed pricing of 8 of those new scope equipment codes. Commenters
                also stated that they appreciated the proposal of scope replacements
                for 100 CPT codes as recommended by the RUC utilizing the 8 scopes that
                CMS was able to price. One commenter encouraged CMS to continue to work
                with the RUC workgroup and other stakeholders to obtain detailed
                invoices for the scopes for which it did not have pricing data to
                assist in the correct pricing and transition of these equipment items.
                    Response: We appreciate the support for our proposals from the
                commenters. We welcome the submission of additional pricing data from
                the RUC scope workgroup and other stakeholders regarding the pricing of
                the remaining scope equipment items.
                    Comment: One commenter stated that they appreciated the recognition
                of the existing specialized equipment that is required in addition to
                the proposed scope equipment, and they supported the proposal to add
                ES080 and retain ES027 or ES028 at the same equipment time for CPT
                codes 92612, 92614, and 92616.
                    Response: We appreciate the support for our proposals from the
                commenter.
                    Comment: Several commenters stated it was their understanding that
                additional scope pricing information submitted now would be considered
                for the CY 2021 PFS proposed rule. These commenters asked for
                clarification that the CPT codes impacted by any scope proposals for CY
                2021 will be outlined in a table just as the impacted codes for CY 2020
                were outlined in Table 7, so that they will be subject to stakeholder
                review and comment prior to implementation.
                    Response: As we stated in the proposed rule, we welcome additional
                feedback from stakeholders regarding the pricing of these remaining
                scope equipment items, especially the submission of detailed invoices
                with pricing data. Any future proposals that we make regarding scope
                equipment will be subject to notice and comment rulemaking, including
                displaying information in a table similar Table 7, if it would be
                appropriate to do so.
                    Comment: A commenter stated that they had identified
                inconsistencies with the scope workgroup recommendations for a small
                number of HCPCS codes. The commenter stated that CPT code 45350
                (Sigmoidoscopy, flexible; with band ligation(s) (e.g., hemorrhoids))
                was recommended by the workgroup to include a multi-channeled flexible
                digital scope, flexible sigmoidoscopy (ES085); however, CMS noted in
                the proposed rule that this CPT code does not include any scopes among
                its current direct PE inputs. The commenter stated that all codes in
                the flexible sigmoidoscopy family require a flexible sigmoidoscope in
                order to perform the procedure, and therefore, the commenter requested
                that CMS add the ES085 scope equipment to CPT code 45350.
                    Response: We appreciate the feedback from the commenter in pointing
                out this inconsistency in the direct PE inputs for CPT code 45350.
                Based on the information supplied by the commenter, we are finalizing
                the addition of the ES085 scope equipment to CPT code 45350. We are
                finalizing an equipment time of 59 minutes based on the use of our
                standard equipment time formula for scopes.
                    Comment: A commenter requested that the ``rigid scope,
                hysteroscopy'' (ES071) equipment be updated to read ``rigid scope,
                channeled, hysteroscopy'' and that the hysteroscopy codes (that is, CPT
                codes 58555, 58562, 58565) be valued with ES071. The commenter
                submitted an invoice with pricing information associated with the ES071
                scope equipment.
                    Response: We appreciate the submission of an invoice from the
                commenter for use in pricing the ES071 scope. Based on the information
                provided by the commenter, we are finalizing a change in the name of
                the ES071 scope from ``rigid scope, hysteroscopy'' to ``rigid scope,
                channeled, hysteroscopy.'' We are also finalizing a price of $6,795 for
                the ES071 scope based on the pricing data supplied by the commenter,
                and we are finalizing the replacement of the existing ``endoscope,
                rigid, hysteroscopy'' (ES009) scope with the new ES071 scope equipment.
                The CPT codes affected by this replacement are CPT codes 58555, 58562,
                and 58565 as identified by the commenter, as well as CPT code 58563
                which is the only other code that previously employed the ES009 scope.
                These scope replacements are summarized below in Table 9.
                    Comment: One commenter provided a series of invoices for different
                types of rigid scopes in response to the comment solicitation.
                    Response: We appreciate the submission of additional invoices from
                the commenter. Based on the
                [[Page 62592]]
                information included in these invoices, we are finalizing prices for
                three scopes that did not previously have pricing data. We are
                finalizing a price of $2,333.98 for the ``rigid scope, otoscopy''
                (ES072) equipment, a price of $3,004.75 for the ``rigid scope, nasal/
                sinus endoscopy'' (ES073) equipment, and a price of $21,923.425 for the
                ``non-channeled flexible digital scope, nasopharyngoscopy'' (ES078)
                equipment. We are not finalizing the replacement of any of the old
                scope equipment codes with these three new scope equipment items for CY
                2020, as the commenter did not identify the HCPCS codes in which this
                replacement would take place. We will consider additional scope pricing
                information for these three scope equipment codes, including the HCPCS
                codes in which they would typically be employed, as part of the CY 2021
                PFS proposed rule.
                    The commenter also provided five new invoices for the pricing of
                the ``non-video flexible scope, laryngoscopy'' (ES092) equipment. These
                five invoices had an average price of $5,105.97, which was nearly
                identical to our proposed price of $5,078.04 for the ES092 scope. We
                believe that these invoices reinforce the accuracy of the proposed
                pricing. We are finalizing an increase in the price of the ES092 scope
                to $5,105.97, which will slightly increase the direct costs for the 14
                HCPCS codes containing this scope listed above in Table 7.
                    Comment: Several commenters sent a series of additional invoices,
                and recommended crosswalks from existing equipment codes to the
                proposed equipment codes to ensure that the equipment currently listed
                for GI endoscopy procedures was appropriately attributed to the correct
                new scopes. Although the commenters did not provide information to
                update any of the proposed scope equipment prices, the commenters did
                clarify that several of the new scope equipment items which lacked
                proposed prices in fact shared the same current scope equipment codes
                as other new scope equipment items that did have proposed pricing. For
                example, CMS proposed to replace the ``videoscope, gastroscopy''
                (ES034) scope equipment with the new ``multi-channeled flexible digital
                scope, esophagoscopy'' (ES088) scope equipment. The commenters
                clarified that this same ES034 equipment, when used in additional CPT
                codes, would be replaced by either the ``multi-channeled flexible
                digital scope, esophagoscopy gastroscopy duodenoscopy'' (ES087) or the
                ``multi-channeled flexible digital scope, ileoscopy'' (ES089) equipment
                items, all of which should share the same proposed price of $34,585.35.
                The commenter also explained that the same ``Video Sigmoidoscope''
                (ES043) equipment which CMS proposed to replace with the ``multi-
                channeled flexible digital scope, pouchoscopy'' (ES090) new scope
                equipment would, in additional CPT codes, be replaced by the new
                ``multi-channeled flexible digital scope, flexible sigmoidoscopy''
                (ES085) scope equipment, and that both ES085 and ES090 should share the
                same proposed price of $19,308.56. Finally, the commenter also stated
                that the new ``ultrasound digital scope, endoscopic ultrasound''
                (ES091) equipment item would only be used in the facility setting, and
                that none of the HCPCS codes that included this scope contained direct
                PE inputs.
                    Response: We appreciate the submission of additional invoices and
                the clarification of the relationship between the former scope
                equipment codes and the newly created scope equipment codes. After
                considering this additional information supplied by the commenters, we
                are updating Table 8 of CY 2020 new scope equipment codes.
                [[Page 62593]]
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                    We note again that we are not finalizing changes to the pricing of
                the group of new scope equipment codes with previously proposed prices,
                aside from the minor increase in the price of the ES092 equipment, only
                newly pricing several scopes that previously lacked pricing, and
                extending proposed pricing such that the ES087 and ES089 scopes share
                the same price with the ES088 scope, and the ES090 scope shares the
                same price with the ES085 scope. The new scope equipment codes ES087,
                ES088, and ES089 all share the same price because they are replacing
                the same current scope equipment code (ES034), and similarly the new
                ES085 and ES090 scope equipment codes share the same price because they
                are both replacing the same current scope equipment code (ES043). There
                are 21 HCPCS codes which are affected by the new scope replacements;
                these codes are detailed in Table 9.
                BILLING CODE 4120-01-P
                [[Page 62594]]
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                [[Page 62595]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.013
                BILLING CODE 4120-01-C
                    Although we are updating the scope equipment pricing for CY 2020
                such that the ES087 and ES089 scopes share the same price with the
                ES088 scope, and the ES090 scope shares the same price with the ES085
                scope, we do not mean to suggest that these scopes that share pricing
                are identical with one another. We are assigning the same price to
                these scopes because they are replacing the same current scope
                equipment codes, and because we do not have individual pricing
                information for them at the moment. We are open to the submission of
                additional invoices in future rule cycles to establish individual
                pricing for these scopes, and we continue to welcome more data to help
                identify pricing for the remaining 7 scope equipment codes that still
                lack invoices.
                    After consideration of the public comments, we are finalizing
                pricing for the new scope equipment as detailed above in Table 8. We
                are also finalizing the scope equipment replacements as detailed in
                Tables 7 and 9.
                c. Technical Corrections To Direct PE Input Database and Supporting
                Files
                    Subsequent to the publication of the CY 2019 PFS final rule,
                stakeholders alerted us to several clerical inconsistencies in the
                direct PE database. We proposed to correct these inconsistencies as
                described below and reflected in the CY 2020 proposed direct PE input
                database displayed on the CMS website under downloads for the CY 2020
                PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    For CY 2020, we proposed to address the following inconsistencies:
                     The RUC's Scope Equipment Reorganization Workgroup
                recommended deletion of the non-facility inputs for CPT codes 43231
                (Esophagoscopy, flexible, transoral; with endoscopic ultrasound
                examination) and 43232 (Esophagoscopy, flexible, transoral; with
                transendoscopic ultrasound-guided intramural or transmural fine needle
                aspiration/biopsy(s)). The gastroenterology specialty societies stated
                that these services are never performed in the non-facility setting.
                After our own review of these services, we agreed with the workgroup's
                recommendation, and we proposed to remove the non-facility direct PE
                inputs for these two CPT codes.
                     In rulemaking for CY 2018, we reviewed a series of CPT
                codes describing nasal sinus endoscopy surgeries. At that time, we
                sought comments on whether the broader family of nasal sinus endoscopy
                surgery services should be subject to the special rules for multiple
                endoscopic procedures instead of the standard multiple procedure
                payment reduction. We received very few comments in response to our
                solicitation. In the CY 2018 PFS final rule (82 FR 53043), we indicated
                that we would continue to explore this option for future rulemaking. We
                proposed to apply the special rule for multiple endoscopic procedures
                to this family of codes beginning in CY 2020. We noted this proposal
                would treat this group of CPT codes consistently with other similar
                endoscopic procedures when codes within the CPT code family are billed
                together with another endoscopy service in the same family. Similar to
                other similar endoscopic procedure code families, we proposed that CPT
                code 31231 (Nasal endoscopy, diagnostic, unilateral or bilateral
                (separate procedure)) would be the base procedure for the remainder of
                nasal sinus endoscopies. The codes affected by the proposal are
                detailed in Table 10.
                [[Page 62596]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.014
                    Special rules for multiple endoscopic procedures would apply if any
                of the procedures listed in Table 10 are billed together for the same
                patient on the same day. We apply the multiple endoscopy payment rules
                to a code family before ranking the family with other procedures
                performed on the same day (for example, if multiple endoscopies in the
                same family are reported on the same day as endoscopies in another
                family, or on the same day as a non-endoscopic procedure). If an
                endoscopic procedure is reported together with its base procedure, we
                do not pay separately for the base procedure. Payment for the base
                procedure is included in the payment for the other endoscopy. For
                additional information about the payment adjustment under the special
                rule for multiple endoscopic services, we refer readers to the CY 1992
                PFS final rule where this policy was established (56 FR 59515) and to
                Public Law 100-04, Medicare Claims Processing Manual, Chapter 23
                (available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c23.pdf).
                    We received public comments on the proposed technical corrections
                to the direct PE input database and supporting files. The following is
                a summary of the comments we received and our responses.
                    Comment: One commenter agreed with the RUC workgroup's
                recommendation and the CMS proposal to remove the non-facility direct
                PE inputs from CPT code 43231 and 43232.
                    Response: We appreciate the support for our proposals from the
                commenter.
                    Comment: One commenter stated that the proposed approach for nasal
                sinus endoscopy procedure better reflects the work RVU associated with
                the different levels of sinus endoscopy procedures and stated their
                support for this payment change. The commenter requested clarification
                regarding the application of the bilateral adjustment in conjunction
                with the special rules for multiple endoscopic procedures. The
                commenter stated that it was their understanding that if the CPT code
                is reported as a bilateral procedure and is reported with other
                procedure codes on the same day, the guidance is to apply the bilateral
                adjustment before applying any form of multiple procedure rules.
                    Response: The special rule for multiple endoscopic procedures has
                been described correctly in general terms by the commenter, although we
                encourage readers once again to refer to the CY 1992 PFS final rule
                where this policy was established (56 FR 59515) and to Public Law 100-
                04, Medicare Claims Processing Manual, Chapter 23. This manual text
                states that special rules for multiple endoscopic procedures apply if
                the procedure is billed with another endoscopy in the same family
                (i.e., another endoscopy that has the same base procedure). The base
                procedure for each code with this indicator is identified in the
                endoscopic base code field. In these situations, we apply the multiple
                endoscopy rules to a family before ranking the family with other
                procedures performed on the same day (for example, if multiple
                endoscopies in the same family are reported on the same day as
                endoscopies in another family or on the same day as a non-endoscopic
                procedure). If an endoscopic procedure is reported with only its base
                procedure, we do not pay separately for the base procedure. Payment for
                the base procedure is included in the payment for the other endoscopy.
                    Comment: A commenter requested clarification regarding the proposal
                to apply the special rule for multiple endoscopic procedures to the
                family of codes listed in Table 10. The commenter stated that it was
                their understanding that that the diagnostic endoscopy described by CPT
                code 31231 is included in the valuation of all of the surgical
                procedure codes on the list (for example, CPT codes 31254, 31256,
                31276, etc.), and therefore, CPT Code 31231 would not be billed on the
                same side that any nasal endoscopic surgical code(s) are performed.
                However, the commenter stated that it was their understanding that CPT
                code 31231 could be billed for one side of the nose if it was the only
                procedure performed and there was no surgical intervention on that
                side. Assuming that this interpretation was correct, the commenter
                stated that they supported the application of the special rules for
                endoscopy to the nasal endoscopy family.
                    Response: We reiterate that the special rule for multiple
                endoscopic procedures has been described correctly in general terms by
                the commenter, although we encourage readers once again to refer to the
                CY 1992 PFS final rule where this policy was established (56 FR 59515)
                and to Public Law 100-
                [[Page 62597]]
                04, Medicare Claims Processing Manual, Chapter 23. We encourage
                stakeholders to contact their local Medicare Administrative Contractor
                (MAC) for information regarding proper billing instructions for CPT
                code 31231.
                    Comment: One commenter stated that they were troubled by the
                proposal to apply the multiple endoscopy payment methodology to the CPT
                codes included in Table 10 without further clarification in the
                regulatory language or the Medicare Carriers Manual about the number of
                multiple procedure modifiers CMS can append to one claim. The commenter
                questioned whether these 27 codes will be assigned a multiple procedure
                indicator of ``3'' and if that would override the prior multiple
                procedure indicator of ``4''. The commenter stated that they did not
                support the application of multiple endoscopy payment rules if CMS
                intended to assign reductions for both multiple endoscopy and multiple
                procedures, as application of both payment rules would result in
                inappropriate reductions to this set of services.
                    Response: In response to the commenter's question, only one
                multiple procedure indicator can be applied to each HCPCS code. We also
                clarify that our proposal would assign a multiple procedure indicator
                of ``3'' to all of the codes listed in Table 10 aside from CPT code
                31231, which would be the endoscopic ``base code'' and would be
                assigned a multiple procedure indicator of ``2''. We also note that
                none of these codes previously contained a multiple procedure indicator
                of ``4'', which is associated with certain diagnostic imaging services.
                We encourage readers once again to refer to the CY 1992 PFS final rule
                where this policy was established (56 FR 59515) and to Pub. 100-04,
                Medicare Claims Processing Manual, Chapter 23.
                    Comment: One commenter stated that although they recognized that by
                including the nasal endoscopy family among the codes using the special
                rule for multiple endoscopies, CMS may be trying to harmonize
                endoscopic procedures, and they stated that the unique situation
                surrounding the nasal endoscopy code family should prohibit the
                application of this special rule. The commenter stated that the nasal
                endoscopy code family differed significantly from colonoscopy
                procedures in that there is not uniformity across the sites of service
                where these sinus procedures are performed, since these services could
                be performed in both the facility and non-facility settings. The
                commenter stated that applying the special rules for multiple
                endoscopic procedures to this group would result in a significant
                inappropriate reduction in the value of the secondary and subsequent
                nasal surgical codes performed on the same patient on the same day when
                performed in the office setting, and the commenter stated that they
                opposed the application of the special rules for multiple endoscopies
                to the nasal endoscopy family in the non-facility setting.
                    Response: We disagree that this nasal endoscopy code family differs
                significantly from other colonoscopy families where the special rule
                for multiple endoscopic procedures has long been in place. Although the
                commenter stated that the nasal endoscopy codes were unique in the
                sense that they could be performed in both the facility and non-
                facility settings, and that the base code for the family, CPT code
                31231, is typically an office-based procedure with significant PE built
                into the code, we note in response that there are many other groups of
                codes which utilize the special rule for multiple endoscopic procedures
                and are also performed in both the facility and non-facility settings.
                These include CPT codes 31573-31579 (base CPT code 31575), CPT codes
                43220-43229 (base CPT code 43220), CPT codes 44389-44394 (base CPT code
                44388), and CPT codes 45303-45320 (base CPT code 45300). There are
                dozens of these codes which can be performed in both the facility and
                non-facility settings, many of them with significant PE inputs built
                into their non-facility valuation. In light of this evidence, we
                disagree with the commenter that there is a unique situation regarding
                the nasal endoscopy family of codes.
                    Comment: Several commenters requested that CMS utilize the RUC-
                recommended direct PE inputs to publish PE relative value units for CPT
                code 90460, which was reviewed by the RUC in October 2009. Rather than
                finalize the RUC recommendations, CMS crosswalked CPT code 90460 from
                CPT code 90471, which is crosswalked from CPT code 96372 (formerly CPT
                code 90772 and then 90782). Commenters stated that the recent measles
                crisis spotlights the importance of immunization administration being
                appropriately valued, and that the crosswalk from CPT code 96372 to
                codes CPT codes 90471/90460 has brought about a 60 percent reduction in
                PE RVUs. Commenters stated that CMS typically only uses a crosswalk for
                work values, not PE values, and requested that CMS disconnect the codes
                after the initial crosswalk so that changes to the source code no
                longer affect the crosswalked code. One commenter stated that CMS was
                proposing to reduce the non-facility PE RVUs for CPT code 90471 from
                0.29 in 2019 to 0.22 in 2020, and while this may appear to be a
                relatively small change in RVUs, if finalized it would reduce the
                national unadjusted payment for CPT code 90471 (and consequently the
                payment rates for HCPCS codes G0008 and G0009) by 15 percent.
                    Response: We appreciate the feedback from the commenters and note
                that we finalized the crosswalks associated with CPT code 90460 in the
                CY 2011 final rule (75 FR 73306). However, we note that we are
                separately addressing the valuation of HCPCS codes G0008, G0009, and
                G0010 in the codes valuation section of this rule.
                    We also received comments regarding a variety of subjects about
                which we did not make proposals for CY 2020. These included comments
                regarding the proper specialty employed to determine indirect cost
                factors for home PT/INR monitoring services and the application of the
                multiple procedure payment reduction to physical therapist services. We
                will take the feedback from the commenters on these subjects into
                consideration for future rulemaking.
                    After consideration of the public comments, we are finalizing the
                proposal to remove the non-facility direct PE inputs from CPT code
                43231 and 43232. We are also finalizing the proposal to apply the
                special rule for multiple endoscopic procedures to the family of codes
                listed in Table 10 without refinement.
                d. Updates to Prices for Existing Direct PE Inputs
                    In the CY 2011 PFS final rule with comment period (75 FR 73205), we
                finalized a process to act on public requests to update equipment and
                supply price and equipment useful life inputs through annual
                rulemaking, beginning with the CY 2012 PFS proposed rule. For CY 2020,
                we proposed the following price updates for existing direct PE inputs.
                    We proposed to update the price of one supply and one equipment
                item in response to the public submission of invoices. As these pricing
                updates were each part of the formal review for a code family, we
                proposed that the new pricing take effect for CY 2020 for these items
                instead of being phased in over 4 years.
                    We also proposed to update the name of the EP001 equipment item
                from ``DNA/digital image analyzer (ACIS)'' to ``DNA/Digital Image
                Analyzer'' due to
                [[Page 62598]]
                clarification from stakeholders regarding the typical use of this
                equipment.
                (1) Market-Based Supply and Equipment Pricing Update
                    Section 220(a) of the Protecting Access to Medicare Act of 2014
                (PAMA) (Pub. L. 113-93) provides that the Secretary may collect or
                obtain information from any eligible professional or any other source
                on the resources directly or indirectly related to furnishing services
                for which payment is made under the PFS, and that such information may
                be used in the determination of relative values for services under the
                PFS. Such information may include the time involved in furnishing
                services; the amounts, types and prices of PE inputs; overhead and
                accounting information for practices of physicians and other suppliers,
                and any other elements that would improve the valuation of services
                under the PFS.
                    As part of our authority under section 1848(c)(2)(M) of the Act, we
                initiated a market research contract with StrategyGen to conduct an in-
                depth and robust market research study to update the PFS direct PE
                inputs (DPEI) for supply and equipment pricing for CY 2019. These
                supply and equipment prices were last systematically developed in 2004-
                2005. StrategyGen submitted a report with updated pricing
                recommendations for approximately 1,300 supplies and 750 equipment
                items currently used as direct PE inputs. This report is available as a
                public use file displayed on the CMS website under downloads for the CY
                2019 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    The StrategyGen team of researchers, attorneys, physicians, and
                health policy experts conducted a market research study of the supply
                and equipment items currently used in the PFS direct PE input database.
                Resources and methodologies included field surveys, aggregate
                databases, vendor resources, market scans, market analysis, physician
                substantiation, and statistical analysis to estimate and validate
                current prices for medical equipment and medical supplies. StrategyGen
                conducted secondary market research on each of the 2,072 DPEI medical
                equipment and supply items that CMS identified from the current DPEI.
                The primary and secondary resources StrategyGen used to gather price
                data and other information were:
                     Telephone surveys with vendors for top priority items
                (Vendor Survey).
                     Physician panel validation of market research results,
                prioritized by total spending (Physician Panel).
                     The General Services Administration system (GSA).
                     An aggregate health system buyers database with discounted
                prices (Buyers).
                     Publicly available vendor resources, that is, Amazon
                Business, Cardinal Health (Vendors).
                     Federal Register, current DPEI data, historical proposed
                and final rules prior to CY 2018, and other resources; that is, AMA RUC
                reports (References).
                    StrategyGen prioritized the equipment and supply research based on
                current share of PE RVUs attributable by item provided by CMS.
                StrategyGen developed the preliminary Recommended Price (RP)
                methodology based on the following rules in hierarchical order
                considering both data representativeness and reliability.
                    (1) If the market share, as well as the sample size, for the top
                three commercial products were available, the weighted average price
                (weighted by percent market share) was the reported RP. Commercial
                price, as a weighted average of market share, represents a more robust
                estimate for each piece of equipment and a more precise reference for
                the RP.
                    (2) If no data were available for commercial products, the current
                CMS prices were used as the RP.
                    GSA prices were not used to calculate the StrategyGen recommended
                prices, due to our concern that the GSA system curtails the number and
                type of suppliers whose products may be accessed on the GSA Advantage
                website, and that the GSA prices may often be lower than prices that
                are available to non-governmental purchasers. After reviewing the
                StrategyGen report, we proposed to adopt the updated direct PE input
                prices for supplies and equipment as recommended by StrategyGen.
                    StrategyGen found that despite technological advancements, the
                average commercial price for medical equipment and supplies has
                remained relatively consistent with the current CMS price.
                Specifically, preliminary data indicated that there was no
                statistically significant difference between the estimated commercial
                prices and the current CMS prices for both equipment and supplies. This
                cumulative stable pricing for medical equipment and supplies appears
                similar to the pricing impacts of non-medical technology advancements
                where some historically high-priced equipment (that is, desktop PCs)
                has been increasingly substituted with current technology (that is,
                laptops and tablets) at similar or lower price points. However, while
                there were no statistically significant differences in pricing at the
                aggregate level, medical specialties would experience increases or
                decreases in their Medicare payments if CMS were to adopt the pricing
                updates recommended by StrategyGen. At the service level, there may be
                large shifts in PE RVUs for individual codes that happened to contain
                supplies and/or equipment with major changes in pricing, although we
                note that codes with a sizable PE RVU decrease would be limited by the
                requirement to phase in significant reductions in RVUs, as required by
                section 1848(c)(7) of the Act. The phase-in requirement limits the
                maximum RVU reduction for codes that are not new or revised to 19
                percent in any individual calendar year.
                    We believe that it is important to make use of the most current
                information available for supply and equipment pricing instead of
                continuing to rely on pricing information that is more than a decade
                old. Given the potentially significant changes in payment that would
                occur, both for specific services and more broadly at the specialty
                level, in the CY 2019 PFS proposed rule we proposed to phase in our use
                of the new direct PE input pricing over a 4-year period using a 25/75
                percent (CY 2019), 50/50 percent (CY 2020), 75/25 percent (CY 2021),
                and 100/0 percent (CY 2022) split between new and old pricing. This
                approach is consistent with how we have previously incorporated
                significant new data into the calculation of PE RVUs, such as the 4-
                year transition period finalized in CY 2007 PFS final rule with comment
                period when changing to the ``bottom-up'' PE methodology (71 FR 69641).
                This transition period will not only ease the shift to the updated
                supply and equipment pricing, but will also allow interested parties an
                opportunity to review and respond to the new pricing information
                associated with their services.
                    We proposed to implement this phase-in over 4 years so that supply
                and equipment values transition smoothly from the prices we currently
                include to the final updated prices in CY 2022. We proposed to
                implement this pricing transition such that one quarter of the
                difference between the current price and the fully phased-in price is
                implemented for CY 2019, one third of the difference between the CY
                2019 price and the final price is implemented for CY 2020, and one half
                of the difference between the CY 2020 price and the final price is
                implemented for CY 2021, with the new direct PE prices
                [[Page 62599]]
                fully implemented for CY 2022. An example of the transition from the
                current to the fully-implemented new pricing is provided in Table 11.
                [GRAPHIC] [TIFF OMITTED] TR15NO19.015
                    For new supply and equipment codes for which we establish prices
                during the transition years (CYs 2019, 2020 and 2021) based on the
                public submission of invoices, we proposed to fully implement those
                prices with no transition since there are no current prices for these
                supply and equipment items. These new supply and equipment codes would
                immediately be priced at their newly established values. We also
                proposed that, for existing supply and equipment codes, when we
                establish prices based on invoices that are submitted as part of a
                revaluation or comprehensive review of a code or code family, they will
                be fully implemented for the year they are adopted without being phased
                in over the 4-year pricing transition. The formal review process for a
                HCPCS code includes a review of pricing of the supplies and equipment
                included in the code. When we find that the price on the submitted
                invoice is typical for the item in question, we believe it would be
                appropriate to finalize the new pricing immediately along with any
                other revisions we adopt for the code valuation.
                    For existing supply and equipment codes that are not part of a
                comprehensive review and valuation of a code family and for which we
                establish prices based on invoices submitted by the public, we proposed
                to implement the established invoice price as the updated price and to
                phase in the new price over the remaining years of the proposed 4-year
                pricing transition. During the proposed transition period, where price
                changes for supplies and equipment are adopted without a formal review
                of the HCPCS codes that include them (as is the case for the many
                updated prices we proposed to phase in over the 4-year transition
                period), we believe it is important to include them in the remaining
                transition toward the updated price. We also proposed to phase in any
                updated pricing we establish during the 4-year transition period for
                very commonly used supplies and equipment that are included in 100 or
                more codes, such as sterile gloves (SB024) or exam tables (EF023), even
                if invoices are provided as part of the formal review of a code family.
                We would implement the new prices for any such supplies and equipment
                over the remaining years of the proposed 4-year transition period. Our
                proposal was intended to minimize any potential disruptive effects
                during the proposed transition period that could be caused by other
                sudden shifts in RVUs due to the high number of services that make use
                of these very common supply and equipment items (meaning that these
                items are included in 100 or more codes).
                    We believed that implementing the proposed updated prices with a 4-
                year phase-in would improve payment accuracy, while maintaining
                stability and allowing stakeholders the opportunity to address
                potential concerns about changes in payment for particular items.
                Updating the pricing of direct PE inputs for supplies and equipment
                over a longer timeframe will allow more opportunities for public
                comment and submission of additional, applicable data. We welcomed
                feedback from stakeholders on the proposed updated supply and equipment
                pricing, including the submission of additional invoices for
                consideration.
                    We received many comments regarding the market-based supply and
                equipment pricing proposal following the publication of the CY 2019 PFS
                proposed rule. For a full discussion of these comments, we direct
                readers to the CY 2019 PFS final rule (83 FR 59475-59480). In each
                instance in which a commenter raised questions about the accuracy of a
                supply or equipment code's recommended price, the StrategyGen
                contractor conducted further research on the item and its price with
                special attention to ensuring that the recommended price was based on
                the correct item in question and the clarified unit of measure. Based
                on the commenters' requests, the StrategyGen contractor conducted an
                extensive examination of the pricing of any supply or equipment items
                that any commenter identified as requiring additional review. Invoices
                submitted by multiple commenters were greatly appreciated and ensured
                that medical equipment and supplies were re-examined and clarified.
                Multiple researchers reviewed these specified supply and equipment
                codes for accuracy and proper pricing. In most cases, the contractor
                also reached out to a team of nurses and their physician panel to
                further validate the accuracy of the data and pricing information. In
                some cases, the pricing for individual items needed further
                clarification due to a lack of information or due to significant
                variation in packaged items. After consideration of the comments and
                this additional price research, we updated the recommended prices for
                approximately 70 supply and equipment codes identified by the
                commenters. Table 9 in the CY 2019 PFS final rule lists the supply and
                equipment codes with price changes based on feedback from the
                commenters and the resulting additional research into pricing (83 FR
                59479-59480).
                    After consideration of the public comments, we finalized our
                proposals associated with the market research study to update the PFS
                direct PE inputs for supply and equipment pricing. We continue to
                believe that implementing the proposed updated prices with a 4-year
                phase-in will improve payment accuracy, while maintaining stability and
                allowing stakeholders the opportunity to address potential concerns
                about changes in payment for particular items. We continue to welcome
                feedback from stakeholders on the proposed updated supply and equipment
                pricing, including the submission of additional invoices for
                consideration.
                    For CY 2020, we received invoice submissions for approximately 30
                supply and equipment codes from stakeholders as part of the second year
                of the market-based supply and
                [[Page 62600]]
                equipment pricing update. These invoices were reviewed by the
                StrategyGen contractor and the submitted invoices were used in many
                cases to supplement the pricing originally proposed for the CY 2019 PFS
                rule cycle. The contractor reviewed the invoices, as well as prior data
                for the relevant supply/equipment codes to make sure the item in the
                invoice was representative of the supply/equipment item in question and
                aligned with past research. Based on this research, we proposed to
                update the prices of the supply and equipment items listed in Table 9
                of the CY 2020 PFS proposed rule.
                    For most supply and equipment items, there was an alignment between
                the research carried out by the StrategyGen contractor and the
                submitted invoice. The updated CY 2020 pricing was calculated using an
                average between the previous market research and the newly submitted
                invoices in these cases. In some cases the submitted invoices were not
                representative of market prices, such as for the centrifuge with rotor
                (EP007) equipment item where the invoice price of $8,563 appeared to be
                an outlier. We did not use the invoices to calculate our pricing
                recommendation in these situations and instead continued to rely on our
                prior pricing data. In other instances, such as for the kit, probe,
                cryoablation, prostate (Galil-Endocare) (SA099) supply item, our
                research indicated that the submitted invoice price was more
                representative of the commercial price than our CY 2019 research and
                pricing. We proposed the new invoice prices for these supply and
                equipment items due to our belief in their greater accuracy.
                    For some of the remaining supply and equipment items, such as the
                five-gallon paraffin (EP031) equipment and the Olympus DP21 camera
                (EP089) equipment, we maintained the extant pricing for CY 2019 due to
                a lack of sufficient data to update the pricing. In these situations
                where we did not have an updated price for CY 2019, we believe that the
                newly submitted invoices are more representative of the current
                commercial prices that are being paid on the market. We proposed the
                new invoice prices for these supply and equipment items due to our
                belief in their greater accuracy.
                    In addition, we were alerted by stakeholders that the price of the
                EM visit pack (SA047) supply did not match the sum of the component
                prices of the supplies included in the pack. After reviewing the prices
                of the individual component supplies, we agree with the stakeholders
                that there was a discrepancy in the previous pricing of this supply
                pack. We proposed to update the price of the EM visit pack to $5.47 to
                match the sum of the prices of the component supplies, and proposed to
                continue to transition towards this price over the remaining years of
                the phase-in period.
                    We finalized a policy last year to phase in the new supply and
                equipment pricing over 4 years so that supply and equipment values
                transition smoothly from their current prices to the final updated
                prices in CY 2022. We finalized our proposal to implement this pricing
                transition such that one quarter of the difference between the current
                price and the fully phased in price was implemented for CY 2019, one
                third of the difference between the CY 2019 price and the final price
                is implemented for CY 2020, and one half of the difference between the
                CY 2020 price and the final price is implemented for CY 2021, with the
                new direct PE prices fully implemented for CY 2022. An example of the
                transition from the current to the fully-implemented new pricing is
                provided in Table 11. For CY 2020, one third of the difference between
                the CY 2019 price and the final price will be implemented as per the
                previously finalized policy. Table 12 contains the list of proposed CY
                2020 market-based supply and equipment pricing updates:
                BILLING CODE 4120-01-P
                [[Page 62601]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.016
                [[Page 62602]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.017
                BILLING CODE 4120-01-C
                (2) Invoice Submission
                    The full list of updated supply and equipment pricing as it will be
                implemented over the 4-year transition period will be made available as
                a public use file displayed on the CMS website under downloads for the
                CY 2020 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    We received public comments on updates to prices for existing
                direct PE inputs. The following is a summary of the comments we
                received and our responses.
                    Comment: Many commenters were supportive of the proposed update to
                supply and equipment pricing based on the submission of additional
                invoices as detailed in Table 12. One commenter thanked CMS for
                gathering additional pertinent information and proposing a more
                accurate price for the balloon sinus surgery kit (SA106) supply for CY
                2020. Several commenters urged CMS to finalize the proposed updates to
                the direct PE supplies and equipment prices as listed in the table. One
                commenter encouraged CMS to continue to carefully consider all pricing
                data including invoices and other supporting evidence that they receive
                from the specialty societies throughout this comment period and the
                entirety of the 4-year transition period.
                    Response: We will continue to carefully consider all pricing data
                submitted from commenters throughout the 4-year transition period.
                    Comment: Several commenters stated that they were concerned that
                supply and equipment pricing will quickly become outdated once the
                transition to updated prices is complete in CY 2022. The commenters
                encouraged CMS to move to an ongoing update process for supplies and
                equipment, as well as for clinical labor staff costs, one that is open
                for public comment through the rulemaking process.
                    Response: We share the concerns from the commenters that the supply
                and equipment pricing will eventually become outdated again after the
                pricing transition is complete. We welcome additional feedback from
                stakeholders on potential solutions to this issue, and we will consider
                the possibility of different approaches to supply and equipment pricing
                for use in future rulemaking.
                    Comment: One commenter stated that they appreciated and supported
                recognition by CMS that the supplies and equipment associated with
                physician services were past due for review, but noted that there
                remains large numbers of supplies and equipment that are overdue for
                updates. The commenter stated that they supported a gradual transition
                of the pricing given the widespread impact on the PE values; however,
                doing so creates a situation in which items that have seen dramatic
                increases over a short time are not being adequately compensated for
                several years. The commenter asked CMS to consider shortening the
                transition period from 4 years to 3 years for the supply and equipment
                pricing.
                    Response: Although we appreciate the feedback from the commenter,
                we finalized a policy last year to phase in the new supply and
                equipment pricing over 4 years so that supply and equipment values
                transition smoothly from their current prices to the final updated
                prices in CY 2022 (83 FR 59479-59480). We did not propose any changes
                to this transition period, and therefore, we decline to adopt a
                different approach.
                    Comment: One commenter stated that they supported the CMS proposal
                to update the price of the EM visit pack (SA047) supply to $5.47 to
                match the sum of the prices of the component supplies. The commenter
                also stated that they had concerns over the pricing of the other
                bundled supply items (such as kits, trays, and packs) that may have
                been similarly mispriced by StrategyGen. The commenter stated that they
                could not assist CMS in correcting supply codes that may have been
                incorrectly priced without details about the pricing for individual
                component supplies.
                    Response: We appreciate the support for our proposed pricing of the
                EM visit pack (SA047) supply by the commenter. We encourage
                stakeholders to comment
                [[Page 62603]]
                upon and submit pricing information for any supply items that they
                believe may have been mispriced by StrategyGen. In the absence of
                alternative pricing information, we continue to believe that our
                proposed prices are the most accurate source of data.
                    Comment: One commenter recommended CMS consider only the best
                available evidence and market research data in proposing any changes to
                the pricing approach of the balloon sinus surgery kit (SA106). The
                commenter stated that the use of navigation instruments has increased
                for this supply kit, particularly in the lower cost office setting,
                which enhances the ability to navigate the complex sinus anatomy,
                resulting in improved safety and reliability of the procedure, which
                benefits the patient.
                    Response: We note that the commenter did not make any specific
                recommendations regarding the pricing of this supply or submit invoices
                with additional pricing information. In the absence of alternative
                pricing information, we continue to believe that our proposed prices
                are the most accurate source of data.
                    Comment: Several commenters stated that they supported and urged
                CMS to finalize the proposed prices for the general ultrasound room
                (EL015) and vascular ultrasound room (EL016) equipment. Commenters
                stated that the proposed prices more accurately reflected the costs
                faced by vascular ultrasound practitioners and would reduce health care
                costs by ensuring ultrasound services are readily available to the most
                vulnerable Medicare beneficiaries.
                    Response: We appreciate the support for our proposed pricing by the
                commenters.
                    Comment: One commenter disagreed with the proposed pricing of the
                general ultrasound room (EL015) equipment. The commenter stated that
                the proposed pricing would drastically reduce the general ultrasound
                room price by 65 percent, which would have a downstream impact on the
                vascular ultrasound room, resulting in a 57 percent reduction. The
                commenter stated that a 40 percent reduction in payment as a result of
                this pricing would significantly reduce patient access to ultrasound
                services across the board.
                    Response: We clarify for the commenter that we did not propose a
                reduction in the price of the general ultrasound room (EL015)
                equipment. We proposed to update the price of the general ultrasound
                room to $410,303.32 and proposed to continue to transition towards this
                price over the remaining years of the phase-in period, with a CY 2020
                price of $383,397.77. We note that this is a slight increase over the
                finalized CY 2019 price of $369,945.00; we encourage readers to consult
                the full list of supply and equipment pricing as detailed in the public
                use files.
                    Comment: Several commenters disagreed with the proposed pricing of
                the ``HDR Afterload System, Nucletron--Oldelft'' (ER003) equipment, the
                ``treatment planning system, IMRT (Corvus w-Peregrine 3D Monte Carlo)''
                (ED033) equipment, and the ``SRS system, SBRT, six systems, average''
                (ER083) equipment. The commenters stated that all of these equipment
                items have proposed prices that are below industry standards, and that
                given the high cost of these items and their substantial utilization in
                certain radiation oncology delivery codes, it was imperative that the
                CMS inputs accurately reflect the marketplace pricing. The commenters
                recommended that CMS conduct additional research regarding fair and
                accurate market pricing for equipment items ER003, ED033 and ER083.
                Another commenter also disagreed with the proposed pricing of the ER003
                equipment, and stated that StrategyGen may have included updated
                pricing for a less costly electronic brachytherapy system used to treat
                non-melanoma skin cancer, or alternatively the proposed price for ER003
                may represent an equipment upgrade or refurbished equipment.
                    Response: We share the concerns of the commenters on the importance
                to ensure fair and accurate market-based pricing for supplies and
                equipment. However, the commenters did not submit invoices or other
                pricing data for the ER003, ED033, and ER083 equipment items, and, as
                previously stated, in the absence of alternative pricing information,
                we continue to believe that our proposed prices are the most accurate
                source of data. We continue to welcome feedback from stakeholders on
                the proposed updated supply and equipment pricing over the ongoing 4-
                year transition period, including the submission of additional invoices
                for consideration.
                    Comment: Several commenters stated that they supported the efforts
                by CMS to ensure accurate pricing for direct PE inputs and supported
                the updated valuation of the ultrasound room and vascular ultrasound
                room. However, the commenters stated that there was an inconsistency
                with the pricing for the CT room (EL007), PET room (EL009), and PET-CT
                room (EL010) equipment. The commenters stated that it did not follow
                logically that the EL009 equipment is increasing from $1,328,996 to
                $2,410,677 and the EL007 equipment is increasing from $1,284,000 to
                $1,429,967 while a room that is a combination of these two, EL010, is
                decreasing from $2,136,283 to $206,326. The commenters asked that CMS
                investigate this issue further while delaying any price change for this
                one item.
                    Response: With regards to the pricing of the PET-CT room (EL010)
                equipment, we share the desire of the commenters to ensure fair and
                accurate market-based pricing for this equipment item. However, as we
                noted in the previous comment response, the commenters did not submit
                invoices or other pricing data for the EL010 equipment, and, as
                previously stated, in the absence of alternative pricing information,
                we continue to believe that our proposed prices are the most accurate
                source of data. We remind stakeholders that the proposed pricing was
                based on market research carried out by the StrategyGen contractor
                during the prior rule cycle. We continue to welcome feedback from
                stakeholders on the proposed updated supply and equipment pricing over
                the ongoing 4-year transition period, and we are willing to revisit the
                subject of pricing for this equipment if provided with market-based
                pricing data.
                    Comment: Several commenters disagreed with the proposed price of
                the ``stent, vascular, deployment system, Cordis SMART'' (SA103) and
                ``stent, balloon, implantable'' (SD299) supplies. Commenters stated
                that the Cordis SMART stent (SA103) supply is not FDA approved to stent
                iliac veins in CPT codes 37238-37239 due to the markedly undersized
                diameters of the available stents, and that this supply is essentially
                never used in iliac veins due to its much smaller size. The commenter
                stated that they believe the proposed pricing of the SA103 supply to be
                inaccurate, and stated that they were submitting 10 invoices in the
                hopes of pricing a new supply code at $2,537 which would replace the
                SA103 supply in these CPT codes. The commenters also stated a desire to
                work with CMS to reconsider pricing of the SD299 supply given the
                likely non-viability by CY 2022 of the services represented by CPT
                codes 37236 and 37237 in the office setting, and to resolve the lack of
                clarity surrounding the implantable stent balloon.
                    Response: We appreciate the desire on the part of the commenters to
                submit invoices with additional pricing data. However, despite an
                exhaustive search of the comments, we were unable to find the 10
                invoices mentioned in the letters from the commenters, which
                [[Page 62604]]
                were not included along with the rest of the submitted text. Although
                we are willing to consider these invoices if they were to be submitted,
                as previously stated, in the absence of alternative pricing
                information, we continue to believe that our proposed prices are the
                most accurate source of data. We urge commenters submitting invoices to
                include them as part of their comment letter to avoid any potential for
                miscommunication. We also note for the commenters that we did not make
                any proposals regarding CPT codes 37238-37239 or CPT codes 37236-37237,
                and therefore, we decline to make changes to the supplies for these
                codes at this time.
                    Comment: Several commenters disagreed with the proposed price of
                the percutaneous neuro test stimulation kit (SA022) supply. The
                commenters stated that the proposed price of $114.52 was insufficient
                to reflect the cost associated with the SA022 supply, and that there
                may have been some misunderstanding about what items comprise the
                sacral nerve test kit. The commenters stated that it appears that the
                line item reflecting the device that generates the neurostimulation,
                which is the most expensive component of the test kit, was not included
                in the proposed pricing for this supply, which instead reflects the
                costs of the test kit leads only. The commenters stated that they
                reviewed all of the paid invoices for kits sold during January and
                February 2019, which resulted in pricing that was more in line with the
                CY 2018 pricing of $420 for the kit. One commenter submitted a random
                sample of 120 paid invoices (out of the 481 paid invoices that the
                commenter accumulated in total) for consideration by CMS.
                    Response: We appreciate the submission of a large quantity of
                additional invoices with pricing data from the commenter. After further
                review, we agree with the commenters that the proposed price failed to
                incorporate all of the components of the test kit. Based on the data
                submitted by the commenters, we are finalizing an update in the price
                of the percutaneous neuro test stimulation kit (SA022) supply to
                $413.24, and we will continue to transition towards this price over the
                remaining years of the phase-in period.
                    Comment: One commenter stated that the proposed price of $752.40
                for the ``plasma LDL adsorption column (Liposorber)'' (SD186) supply
                did not accurately reflect the actual average prices paid by their
                provider customers. The commenter submitted copies of all U.S. customer
                invoices for purchases of the SD186 supply for the most recent three-
                month period from June 1 through August 30, 2019 and requested that the
                price should be updated to reflect the average market pricing.
                    Response: We appreciate the submission of a large quantity of
                additional invoices with pricing data from the commenter. Based on the
                data submitted by the commenter, we are finalizing an update in the
                price of the ``plasma LDL adsorption column (Liposorber)'' (SD186)
                supply to $1118.06, and we will continue to transition towards this
                price over the remaining years of the phase-in period.
                    Comment: The same commenter stated that the ``plasma antibody
                adsorption column (Prosorba)'' (SD185) supply was withdrawn from the
                market by its manufacturer more than 10 years ago, and the associated
                procedure code (CPT code 36515) has been deleted. The commenter also
                stated that the blood warmer tubing set (SC084) supply is not utilized
                to perform LDL apheresis with a Liposorber System, and therefore,
                recommended that this supply should be delisted as a direct PE input
                for CPT code 36516.
                    Response: We appreciate the additional information provided by the
                commenter regarding these supply items. After conducting our own
                review, we agree with the commenter that there is no longer any need
                for the ``plasma antibody adsorption column (Prosorba)'' (SD185)
                supply, which is not utilized by any HCPCS codes and has been withdrawn
                from the market. Therefore, we are finalizing the deletion of the SD185
                supply code. We are not finalizing the removal of the blood warmer
                tubing set (SC084) supply at this time, as it is currently utilized in
                two codes (CPT codes 36514 and 36516), and we did not make any
                proposals on this issue. We welcome additional feedback from
                stakeholders regarding the use of the SC084 supply for potential future
                rulemaking.
                    Comment: One commenter stated that they appreciated recent efforts
                by CMS to update the price of supply and equipment inputs to better
                reflect current market rates. The commenter requested that CMS update
                the price inputs for three inputs: The Biodegradable Material Kit--
                PeriProstatic (SA126) supply, the Rezum delivery device kit (SA128)
                supply, and the water thermotherapy procedure generator (EQ389)
                equipment. The commenter submitted invoices with updated pricing data
                for consideration by CMS.
                    Response: Based on the data submitted by the commenters, we are
                finalizing an update in the price of all three of these direct PE
                inputs. We are finalizing an increase in the price of the Biodegradable
                Material Kit--PeriProstatic (SA126) supply from $2,850 to $2,965 based
                on averaging the submission of eight invoices. We are finalizing an
                increase in the price of the Rezum delivery device kit (SA128) supply
                from $1,150 to $1,220 based on averaging the submission of ten
                invoices. Finally, we are finalizing an increase in the price of the
                water thermotherapy procedure generator (EQ389) equipment from $27,538
                to $33,950 based on averaging the submission of two invoices.
                    Comment: One commenter disagreed with the proposed pricing for the
                ``fluorescein inj (5ml uou)'' (SH033) supply. The commenter stated that
                the proposed price for injectable fluorescein was concerning as it did
                not reflect the most recent price increase of nearly 60 percent. The
                commenter stated that for several months practices have been paying
                $38.02 per vial and submitted four invoices to this effect.
                    Response: After reviewing the submitted invoices, we are finalizing
                an increase of the price of the SH033 supply to $38.02 to match the
                information detailed by the commenter.
                    Comment: One commenter disagreed with the proposed pricing for
                HCPCS code G0166 (External counterpulsation, per treatment session) and
                stated that the reductions in the proposed pricing would decrease the
                availability of this service and have already impacted their ability to
                provide external counterpulsation (ECP) therapy. The commenter stated
                that the prior review of HCPCS code G0166 in the CY 2019 rule cycle
                contained major errors, including omissions that artificially deflated
                the cost of the equipment associated with ECP therapy, inappropriate
                valuation of the ECP therapy equipment, and a failure to reflect the
                clinical guidelines and requirements for delivering ECP therapy. The
                commenter requested that CMS reverse the CY 2019 RVU reductions such
                that ECP therapy would return to the CY 2018 payment rates, or
                alternately pause any future reductions until CMS considered and acted
                upon forthcoming RUC recommendations for HCPCS code G0166. The
                commenter also submitted a series of invoices for the EECP external
                counterpulsation system (EQ012) equipment and a number of additional
                equipment items that previously lacked pricing.
                    Response: We remind commenters that we nominated HCPCS code G0166
                as potentially misvalued in the CY 2020 PFS proposed rule (84 FR 40516)
                due to concerns that the RVUs for this code did not fully reflect the
                total resources required to deliver the service. Aside from nominating
                HCPCS code G0166 as
                [[Page 62605]]
                potentially misvalued, we did not make any other proposals concerning
                this code. We are aware that the RUC plans to review HCPCS code G0166
                for the CY 2021 PFS rule cycle, and we look forward to considering
                their recommendations for next year's rulemaking.
                    However, although we are not reviewing the work RVU or direct PE
                inputs for HCPCS code G0166 for CY 2020, we were able to consider the
                submission of invoices from the commenter as part of our market-based
                supply and equipment pricing transition. Based on the information
                provided by the commenters, we are finalizing an increase in the price
                of the EECP external counterpulsation system (EQ012) equipment from
                $61,490.75 to $117,495.00. For the additional equipment items submitted
                by the commenter, which are not currently included in the direct PE
                inputs for HCPCS code G0166, we are finalizing the use of a proxy item
                for equipment pricing. We are finalizing the addition of a medium
                instrument pack (EQ138) priced at $1,500.00 at the same equipment time
                of 73 minutes used by the EECP external counterpulsation system as a
                proxy to represent the cost of these additional items. Although the
                medium instrument pack is a collection of surgical instruments and not
                table accessories, it contains 20 different small items which
                individually fall under our $500 threshold for equipment pricing, much
                as the additional equipment items on the submitted invoices also failed
                to meet the typical $500 threshold. We will further consider pricing
                for both the EECP external counterpulsation as part of the review
                process for this code along with the RUC recommendations when they
                arrive for CY 2021.
                    Comment: One commenter disagreed with the proposed pricing of the
                INR analysis and reporting system w-software (EQ312) equipment. The
                commenter stated that the finalized price for the INR analysis and
                reporting system during the CY 2019 rule cycle was orders of magnitude
                lower than the amount submitted by the home INR manufacturers and
                suppliers, and the commenter was under the belief that the pricing for
                this equipment was not reviewed and/or updated. The commenter urged CMS
                to review and update the price for the PT/INR analysis and reporting
                system based on current market invoices; the commenter also submitted
                additional invoices from the same vendor with their letter.
                    Response: We clarify for the commenter that we did review the
                invoices that they submitted during the previous rule cycle in CY 2019.
                Those invoices, along with the additional invoices submitted for the
                current CY 2020 rule cycle from the same vendor, did not contain
                pricing information for the purchase of an INR analysis and reporting
                system (EQ312) equipment item. These invoices instead constituted a
                monthly service fee for ``customization and management of provided
                applications'' as detailed on the billing form. Under our PE
                methodology, monthly service fees are a form of administrative expense,
                and payment for these costs is included as part of our indirect PE
                allocation. We did not use these invoices for pricing in CY 2019 and we
                are not using them for pricing in CY 2020, as they detail a form of
                indirect PE under our methodology. We also note that the equipment per-
                minute cost formula includes maintenance costs, interest costs, and a
                useful life assumption; this formula already incorporates equipment
                costs that extend across multiple years. Taking a monthly service fee
                and multiplying it across 12 months and then again across 5 years, as
                the commenters suggested should take place for these invoices, would
                result in equipment costs that are inappropriately excessive, such as
                the $6 million equipment price detailed on these invoices. We will
                continue to price the INR analysis and reporting system at $19,325 and
                continue to transition towards this price over the remaining years of
                the phase-in period.
                    After consideration of the public comments, we are finalizing the
                market-based supply and equipment pricing updates listed in Table 12,
                along with the additional finalized pricing changes detailed in the
                preceding paragraphs. The full list of updated supply and equipment
                pricing as it will be implemented over the 4-year transition period
                will be made available as a public use file displayed on the CMS
                website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    We routinely accept public submission of invoices as part of our
                process for developing payment rates for new, revised, and potentially
                misvalued codes. Often these invoices are submitted in conjunction with
                the RUC-recommended values for the codes. For CY 2020, we noted that
                some stakeholders have submitted invoices for new, revised, or
                potentially misvalued codes after the February 10th deadline
                established for code valuation recommendations. 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 would 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.
                (3) Adjustment to Allocation of Indirect PE for Some Office-Based
                Services
                    In the CY 2018 PFS final rule (82 FR 52999 through 53000), we
                established criteria for identifying the services most affected by the
                indirect PE allocation anomaly that does not allow for a site of
                service differential that accurately reflects the relative indirect
                costs involved in furnishing services in nonfacility settings. We also
                finalized a modification in the PE methodology for allocating indirect
                PE RVUs to better reflect the relative indirect PE resources involved
                in furnishing these services. The methodology, as described, is based
                on the difference between the ratio of indirect PE to work RVUs for
                each of the codes meeting eligibility criteria and the ratio of
                indirect PE to work RVU for the most commonly reported visit code. We
                refer readers to the CY 2018 PFS final rule (82 FR 52999 through 53000)
                for a discussion of our process for selecting services subject to the
                revised methodology, as well as a description of the methodology, which
                we began implementing for CY 2018 as the first year of a 4-year
                transition. For CY 2020, we proposed to continue with the third year of
                the transition of this adjustment to the standard process for
                allocating indirect PE.
                    We did not receive any public comments on the proposed adjustments
                to allocation of indirect PE for some office-based services. Therefore,
                we are finalizing the continuation of the third year of the transition
                as proposed.
                e. Technical Evaluation Panel Related to Practice Expense
                    The RAND Corporation is currently studying potential improvements
                to CMS' PE allocation methodology and the data that underlie it. As
                part of this study, RAND will be convening a technical expert panel in
                late 2019 or early 2020 to obtain input from stakeholders including
                physicians, practice and health system managers, health care
                accountants, and health policy experts. The expert panel's
                recommendations will be discussed in a
                [[Page 62606]]
                report to be published by RAND in CY 2020.
                C. Determination of Malpractice Relative Value Units (RVUs)
                1. Overview
                    Section 1848(c) of the Act requires that each service paid under
                the PFS be composed of three components: Work, 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 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 three 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. For CY 2020, we are
                conducting the statutorily required 3-year review of the GPCIs, which
                coincides with the statutorily required 5-year review of the MP RVUs.
                We note that 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. Going forward, we believe it would
                be logical and efficient to align the update of MP premium data used to
                determine the MP RVUs with the update of the MP GPCIs. Therefore, we
                proposed to align the update of MP premium data with the update to the
                MP GPCIs, that is, we proposed to review, and if necessary update the
                MP RVUs at least every 3 years, similar to our review and update of the
                GPCIs. If we align the two updates, we would conduct the next
                statutorily-mandated review and update of both the GPCI and MP RVU for
                implementation in CY 2023. We proposed to implement the fourth
                comprehensive review and update of MP RVUs for CY 2020 and are seeking
                comment on these proposals.
                    We received no specific comment regarding our proposal to align the
                update of MP premium data with the update to the MP GPCIs. That is, to
                review, and if necessary update the MP RVUs at least every 3 years,
                similar to our review and update of the GPCIs; therefore, we are
                finalizing as proposed.
                2. Methodology for the Proposed Revision of Resource-Based Malpractice
                (MP) RVUs
                a. General Discussion
                    We calculated the proposed MP RVUs using updated MP premium data
                obtained from state insurance rate filings. The methodology used in
                calculating the proposed CY 2020 review and update of resource-based MP
                RVUs largely parallels the process used in the CY 2015 update; however,
                we proposed to incorporate several 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.
                We calculated the proposed MP RVUs using four data sources: MP premium
                data presumed to be in effect as of December 31, 2017; CY 2018 Medicare
                payment and utilization data; higher of the CY 2020 proposed work RVUs
                or the clinical labor portion of the direct PE RVUs); and CY 2019
                GPCIs. We used the higher of the CY 2020 final work RVUs or clinical
                labor portion of the direct PE RVUs in our calculation to develop the
                CY 2020 final MP RVUs while maintaining overall PFS budget neutrality.
                    Similar to the CY 2015 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 2020, the most current MP premium data available, with
                a presumed effective date of no later than December 31, 2017, were
                obtained from insurers with the largest market share in each
                [[Page 62607]]
                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 2017 market
                share report was used to select companies. For non-SERFF states without
                online access to filings, the 2016 market share report was used to
                identify 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 2015 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 previous updates,
                specialties for which premium data were not available for at least 35
                states, and specialties for which there were not distinct risk groups
                (surgical, non-surgical, and surgical with obstetrics) among premium
                data in the rate filings, were crosswalked to a similar specialty,
                either conceptually or based on available premium data. This resulted
                in not using those premium data because the 35 state threshold was not
                met. In the CY 2020 PFS proposed rule, we noted that the proposed
                methodological improvements discussed below expands 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 Refinements
                    For the CY 2020 update, we proposed the following methodological
                improvements to the development of MP premium data:
                    (1) Downloading and using a broader set of filings from the largest
                market share insurers in each state, beyond those listed as
                ``physician'' and ``surgeon'' to obtain a more comprehensive data set.
                    We received public comments on the proposed methodological
                improvement to download and use a broader set of filings from the
                largest market share insurers in each state, beyond those listed as
                ``physician'' and ``surgeon'' to obtain a more comprehensive data. The
                following is a summary of the comments we received and our responses.
                    Comment: Commenters noted appreciation for CMS' efforts to improve
                the premium data collection process and the opportunity to provide
                comments on the new methodology. Commenters were supportive of our
                proposed methodological refinement to download and use a broader set of
                filings from the largest market share insurers in each state, beyond
                those listed as ``physician'' and ``surgeon'' to obtain a more
                comprehensive data set.
                    Response: We thank commenters for their feedback and support; we
                are finalizing as proposed.
                    (2) Combining minor surgery and major surgery premiums to create
                the surgery service risk group, which yields a more representative
                surgical risk factor. In the previous update, only premiums for major
                surgery were used in developing the surgical risk factor.
                    We received public comments on the proposed methodological
                improvement to combine minor surgery and major surgery premiums to
                create the surgery service risk group, which yields a more
                representative surgical risk factor. In the previous update, only
                premium data for major surgery were used in developing the surgical
                risk factor. The following is a summary of the comments we received and
                our responses.
                    Comment: Commenters stated they appreciated that CMS considered
                methods to calculate surgical risk factors, but noted concerns with the
                method CMS used to classify surgeries as either minor or major, stating
                it was arbitrary and inconsistent with other CMS policy. Commenters
                further noted that the definition of minor surgeries and major
                surgeries should be consistent and developed with a consensus
                methodology among physician specialties. Commenters recommended that
                CMS work with the physician community to more accurately define major
                and minor surgeries.
                    Response: We thank commenters for their appreciation of our work to
                calculate a more representative surgical risk factor. We note that we
                did not propose definitions for minor and major surgery and will
                continue to work with all interested stakeholders on our proposals.
                    Comment: Commenters were not supportive of our proposal to
                categorize services between HCPCS 59000 and HCPCS 59899 as OB services
                and services between HCPCS 10000 and HCPCS 69999 (excluding the OB
                services) as surgical, with a physician work value greater than 5.00 as
                ``major'' surgery, for the purpose of the analysis. Commenters noted
                that in doing so, CMS selected an arbitrary and misguided definition of
                ``minor'' surgery for any code between the HCPCS 10000 and HCPCS 69999
                section of the CPT code book with a physician work value less than
                5.00. Commenters noted that if CMS intends to collect data at the minor
                vs major level, the data must reflect the different risk factors for
                those specialties and specifically be applied to codes defined as minor
                vs major surgery, and not broadly applied to an entire specialty.
                Commenters noted that the proposal could lead to an unfair valuation
                for certain specialties and services. The commenter further noted that
                CMS should hold off on moving to differentiating between minor and
                major surgeries until CMS is able to work with the RUC and impacted
                specialties to establish such definitions.
                    Response: We reiterate that we did not propose to define minor
                surgery and major surgery. The proposal leveraged an existing policy
                (64 FR 59834), that categorized services within the surgical range of
                HCPCS codes (and the list of invasive cardiology services outside the
                surgical range) as surgical. Building upon that existing policy, we
                proposed a methodological improvement to
                [[Page 62608]]
                combine minor surgery and major surgery premiums when both were
                delineated in rate filings for a specialty and to set a threshold of a
                physician work RVU greater 5.00 to categorize surgical services as
                major surgery, (surgical services under 5.00 would be categorized as
                minor surgery) for the purpose of the analysis. The methodological
                improvement would have developed a more representative surgical risk
                factor by combining minor surgery and major surgery premiums. We
                further note that this would have produced more data to use in the
                analysis and enabled the analysis to reflect a more representative risk
                factor for specialties that could have been applied to the code level
                for services categorized as minor surgery or major surgery. We note
                that in previous updates only major surgery premium data were used
                (when both minor surgery and major surgery are delineated on the rate
                filings for a specialty) to develop the surgical risk factors, this was
                based on a physician work RVU threshold of greater than 5.0, but was
                based on rate filings that delineated major surgery for a specialty.
                    In consideration of concerns from commenters, we are not finalizing
                our proposed methodological refinement to combine major surgery and
                minor surgery premiums when both are delineated on the rate filings for
                a specialty nor are we finalizing our proposal to use a physician work
                RVU greater than 5.00 as a threshold to categorize surgical services as
                major surgery (or to categorize surgical services under 5.00 as minor
                surgery), for the purpose of the analysis. Instead we are finalizing to
                maintain the current methodology and only use major surgery premium
                data when both minor surgery and major surgery are delineated in the
                rate filings for a specialty (minor surgery premium data are discarded
                in those cases) and to use minor surgery premium data when only minor
                surgery premium data are delineated in the rate filings for a
                specialty--to develop surgical risk factors. However, we note that the
                objective of our proposal was to develop a more representative surgical
                risk factor by refining our current methodology to allow for the use of
                rate filings data that delineated minor and major surgery. Our work to
                establish methods to categorize surgical services as minor and major
                surgery is ongoing, we look forward to working with and receiving
                feedback from stakeholders for consideration in future rulemaking.
                    (3) Utilizing partial and total imputation to develop a more
                comprehensive data set when CMS specialty names are not distinctly
                identified in the insurer filings, which sometimes use unique specialty
                names.
                    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 proposed 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
                proposed to use total imputation to establish premiums.
                    For example, if a specialty of Sleep Medicine is listed on some
                insurers' rate filings, this rate will be matched to the CMS specialty
                Sleep Medicine (C0)--partial imputation. However, if the Sleep Medicine
                specialty is not listed on the insurer's rate filing, under our
                proposed methodology, the insurer's rate filing for General Practice
                would be matched to the CMS specialty of Sleep Medicine (C0)--total
                imputation. In this example, we believe (consistent with the
                longstanding mappings of the regulatory impact table included in all
                PFS Federal Register notices) that the rate for General Practice is
                likely to be consistent with the rate that a Sleep Medicine provider
                would be charged by that insurer, this principle for mapping is used
                for the appropriate type of imputation. We note the proposed
                methodological improvement would mean that instead of discarding
                specialty-specific information from some insurers' filings because
                other insurers lacked that same level of detail, we would instead
                impute the missing rates at the insurer/specialty level to utilize as
                much of the information from the filings as possible.
                    We solicited comment on these proposed methodological improvements.
                Additional technical details about our proposal are available in our
                interim report, ``Interim Report for the CY 2020 Update of GPCIs and MP
                RVUs for the Medicare Physician Fee Schedule,'' on our website. It is
                located under the supporting documents section for the CY 2020 PFS
                proposed rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
                    We received public comments on the proposed methodological
                improvement to utilize partial and total imputation to develop a more
                comprehensive data set when CMS specialty names are not distinctly
                identified in the insurer filings, which sometimes use unique specialty
                names. The following is a summary of the comments we received and our
                responses.
                    Comment: Several commenters disagreed with some of the proposed
                specialty mappings for partial and total imputation. Some of these
                commenters recommended that CMS use different mappings other than those
                that were proposed. A few commenters recommended that CMS publish
                impacts for all CMS specialties and not attempt to bundle or map
                specialties to what CMS believes are related specialties or
                professions.
                    Response: We note that 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 for the various specialties that furnish a particular service.
                We reiterate that the proposed mappings for partial imputation parallel
                the longstanding mappings of the regulatory impact table included in
                all PFS Federal Register notices that group CMS specialties (present on
                Medicare claims) into clusters of related specialties (impact
                specialties) when CMS examines the potential impact of PFS payment
                policies on the distribution of payments by providers. This table is
                included in section VII. of this final rule, the Regulatory Impact
                Analysis.
                    Furthermore, the proposed mappings for total imputation (when a CMS
                specialty name is not listed on the insurer's rate filing) reflect the
                speciality-specifc relationship of the underlying principle to identify
                the premium that an individual in a specialty would have been charged.
                The proposed mappings for total imputation, specifically for NPP
                specialties, parallel the proposal to crosswalk NPP specialties for
                which we do not have sufficient comparable professional liability data,
                to the lowest physician specialty, which was found to be allergy/
                immunology.
                    We note that partial and total imputation are necessary to expand
                the specialty specific filings data used to develop the proposed risk
                factors, which are used to develop the proposed MP RVUs. This
                improvement resulted in the development of a more comprehensive data
                set, when CMS specialty names were not distinctly identified in the
                insurer filings, which sometimes use unique specialty names; we are
                finalizing as proposed.
                    Comment: A commenter noted that they joined the RUC in urging CMS
                to collect premium data for specialties that are missing data or where
                data are not available, and in the meantime, to work
                [[Page 62609]]
                with the RUC to better identify appropriate crosswalks.
                    Response: We reiterate that we have, and will continue to work with
                the RUC and all interested stakeholders to improve the premium data
                collection. Moreover, we continue to make progress in this area as
                evidenced in the CY 2020 PFS proposed rule (84 FR 40506), where we
                determined that there were sufficient data for surgery and non-surgery
                premiums, as well as sufficient differences in rates between classes
                for 15 specialties, there were 10 such specialties in the CY 2015
                update.
                    Comment: Commenters recommended that CMS utilize any and all
                premium data available to determine accurate crosswalks for specialties
                that cannot be directly matched to one of CMS' specialty names.
                    Response: We reiterate that we use all of the premium data
                collected to match CMS specialties to the rate that a provider in the
                specialty would have been charged under each filing, even though PLI
                insurers use their own distinctive specialty names.
                    Comment: One commenter recommended that CMS map RFs for cardiac
                electrophysiology to the risk factor for cardiology (surgery) and
                cardiology (no surgery). The commenter noted that they did not
                understand the rationale that CMS applied to determine that the RF
                should be set at 1.89 and ask CMS to detail how it arrived at that
                recommended RF. One commenter noted that electrophysiology is a
                distinct specialty of cardiology, with eligibility for board
                certification in clinical cardiac electrophysiology through the
                American Board of Internal Medicine, as well as in cardiology. Several
                commenters noted that cardiac electrophysiology is a relatively small
                specialty that may not clearly show in premium data. These commenters
                further noted that it would not make sense for services like pacemaker
                implantation that includes placing transvenous wires inside the heart
                or catheter ablations to treat cardiac arrhythmias inside the heart to
                receive a non-surgical PLI risk factor. Several commenters noted that
                cardiac electrophysiology currently has a surgery and non-surgery risk
                factor.
                    Response: We reiterate that details on the data sources and the
                methodological approach used to develop RFs are detailed in the CY 2020
                PFS proposed rule (84 FR 40504) and the interim report for the CY 2020
                Update of GPCIs and MP RVUs for the Medicare PFS. We also remind
                stakeholders that we are using updated premium data as reported in the
                SERFF for participating states and downloaded from the state-specific
                website for non-SERFF states or obtained directly from the state's
                alternate access to filings to develop RFs. We were able to collect
                more data, and use those data to develop specialty-specific RFs for
                specialties that were previously entirely mapped to a different
                specialty out of necessity, because we did not have sufficient data.
                Therefore, we create a specialty-specific RF based on the distinct data
                of each specialty, as reflected in the rate filings, when sufficient.
                Thus, the RFs may be considerably different from the previous update,
                as a result of utilizing the specialty's own data and not that of a
                crosswalk to another specialty as was the case for cardiac
                electrophysiology in the proposed rule. Using these data, as reflected
                in the filings, more accurately reflects premiums associated with the
                specialty.
                    We appreciate the additional information provided by the commenters
                as to why cardiac electrophysiology should remain mapped to the RF for
                cardiology (surgery) and cardiology (no surgery). Upon additional
                review of the additional information provided by commenters, we are not
                finalizing our proposal to map cardiac electrophysiology to a RF of
                1.89, and instead we are finalizing the mapping of RFs for cardiac
                electrophysiology to the risk factor for cardiology (surgery) and
                cardiology (no surgery).
                    Comment: One commenter stated that while the proposal maintains
                CMS' established policy of applying the cardiology surgical risk factor
                to the procedures identified in Table 15 of the CY 2015 PFS proposed
                rule (79 FR 40353 through 40354), it is inconsistent with the CY 2015
                PFS final rule, wherein CMS finalized that the cardiology surgical risk
                factor would apply to a list of procedures (classified as injection
                procedures used in conjunction with cardiac catheterization) that are
                outside the code range that CMS considered surgical. This same
                commenter stated they are concerned that the proposal to have fewer
                subgroups for cardiac electrophysiology inadvertently undervalues many
                cardiology surgical procedures on the basis of subspecialty mix
                performing the procedure, rather than valuing the procedure on its
                surgical status.
                    Response: We believe the commenter may have misinterpreted both the
                CY 2015 PFS proposed rule (79 FR 40353) and CY 2015 PFS final rule (79
                FR 67595), which led to a subsequently misinterpreting what CMS
                proposed to maintain in the CY 2020 PFS proposed rule (84 FR 40504). In
                CY 2015, we finalized a policy to classify invasive cardiology services
                (cardiac catheterizations and angioplasties) that are outside of the
                surgical HCPCS code range as surgery for purposes of assigning
                specialty-specific risk factors, and to apply the higher cardiology
                surgical risk factor to the list of codes outside of the surgical HCPCS
                code range, when those services are performed by providers with a
                specialty of cardiology. To that end, this is not to imply that we
                apply the higher cardiology surgical risk factor to the cardiology
                services that are outside the surgical code range regardless of the
                provider specialty performing those services, as indicated by the
                commenter. We note that the higher surgical risk factor is applied to
                the list of codes outside of the surgical HCPCS code range only when
                performed by a provider with a specialty of cardiology.
                    We reiterate, we calculate service level risk factors based on the
                mix of specialties that furnish a given service as indicated by
                Medicare claims data. Medicare claims data reflect the service volume
                by Medicare primary specialty designations. For CY 2020, we continue to
                classify services that are outside of the surgical HCPCS code range as
                surgery for purposes of assigning specialty-specific risk factors, and
                when furnished by providers with cardiology as the Medicare primary
                specialty code on the Medicare claim, apply the higher cardiology
                surgical risk factor.
                    Comment: One commenter expressed concern with the statement that
                cardiac electrophysiology is not typically associated with the number
                and mix of surgical services of other surgical specialties. The
                commenter further noted that cardiac electrophysiology accounts for
                about 75 percent of the utilization, on average, across the cardiac
                ablation codes, with the specialty of cardiology accounting for most of
                the remainder.
                    Response: We note that the statement ``cardiac electrophysiology is
                not typically associated with the number and mix of surgical services
                of cardiologists'' was not made to imply that providers with a
                specialty of cardiac electrophysiology do not perform surgical
                procedures. We acknowledge that providers with the specialty of cardiac
                electrophysiology perform surgical procedures, as evidenced by our
                classification of codes outside of the surgical HCPCS code range as
                surgery for purposes of assigning specialty-specific risk factors,
                which are performed by providers with specialty of cardiac
                electrophysiology and other specialties.
                [[Page 62610]]
                    Furthermore, in the case of the list of invasive cardiology
                services, classified as surgery for purposes of assigning service level
                risk factors, we note that the percentage of allowed services
                attributed to cardiology decreased for some of these service codes
                while the percentage of allowed services furnished by other specialties
                with risk factors lower than cardiology, such as cardiac physiology,
                increased.
                    Additionally, we received several general comments related to the
                proposed methodological refinements.
                    Comment: One commenter noted appreciation for CMS' attempt to
                improve the premium data collection process, stating that the Agency
                was successful in acquiring national premium data for 16 specialties
                that were formerly mapped entirely to another specialty, and that there
                is no longer a mention of the arbitrary 35 state threshold used in the
                previous update that triggered the CMS crosswalk methodology used to
                develop PLI RVUs for specialties for which there was not premium data
                for at least 35 states.
                    Response: We note that implementation of the methodological
                refinements noted above, no longer necessitated the 35 state threshold.
                    Comment: One commenter noted concerns about the percentage of
                market share premium data that was collected for Connecticut and
                Massachusetts, noting that only 30 percent of market share data were
                collected in that locality, even though Connecticut has relatively high
                PLI premiums, when compared to the rest of the country.
                    Response: As detailed in the ``Final Report for the CY 2020 Update
                of GPCIs and MP RVUs for the Medicare PFS'', which is available on the
                CMS website under the downloads section of the CY 2020 PFS final rule
                at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html medical professional liability insurance
                is issued at maximum coverage limits. Premiums were collected for
                coverage limits of $1 million per occurrence and $3 million aggregate.
                States with Patient Compensation Funds may have different coverage
                limits, which we accounted for, as noted in the aforementioned final
                report. Although data collection for a state may not have met the
                threshold of collecting filings until either cumulative market share
                met or exceeded 50 percent or filings had been collected for four
                groups or companies, it does not imply that premiums were collected for
                coverage limits below $1 million per occurrence and $3 million
                aggregate.
                    We note that the market share filings for Connecticut met the
                threshold, because we collected data for four groups. In the case of
                Massachusetts, this is a non-SERFF state, so we were limited to the
                amount of data provided by the state in response to our request to the
                state for these data; we have revised Table 7.A in the final report to
                easily identify non-SERFF states.
                    Additionally, in our review of the findings reported in Table 7.A
                in the final report, we recognized the need for additional
                clarification for two states. We clarify that data collection for New
                York State did not meet either threshold, because some of the filings
                collected were incomplete and unusable, leaving data for three groups,
                accounting for 32 percent remaining for the market share analysis. In
                the case of Rhode Island, we identified a typographical error in the
                chart, which has been fixed.
                    Comment: Several commenters noted concerns with the data displayed
                in Table 8.B Volume-weighted Distribution of 2017 Physician Work RVUs
                by Service Type by CMS Specialty the final report.
                    Response: We thank commenters for noting their concerns. These data
                display the share of total work RVUs by service risk group used when
                combining or splitting premiums across service risk groups as reported
                by specialties on rate filings to match the final set of specialty/
                service risk groups used in the analysis. The data displayed in that
                table are solely for the purposes of the analysis. In consideration of
                the comments we received, we have provided additional details on the
                calculations in the ``Final Report for the CY 2020 Update of GPCIs and
                MP RVUs for the Medicare PFS'', which is available on the CMS website
                under the downloads section of the CY 2020 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. Additionally, the table has been revised
                to reflect that we are not finalizing our proposed methodological
                refinement to combine minor and major surgery premiums when both are
                present in the filings for a specialty.
                c. Steps for Calculating Malpractice RVUs
                    Calculation 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 factors
                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. We note that not all of the proposed
                methodological refinements are being finalized, and therefore, some of
                steps for calculating malpractice RVUs differ from the proposal.
                    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 2013-2017 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 2019 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 distinct risk factors 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
                [[Page 62611]]
                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 15 specialties
                (there were 10 such specialties in the CY 2015 update). These
                specialties are listed in Table 13. Additionally, as described in the
                proposed methodological refinements, in some instances, we combined
                minor surgery and major surgery premiums to create a premium to develop
                the surgery service risk group, rather than discard minor surgery
                premium data as was done in the previous update. We note that we are
                not finalizing the proposed methodological change to combine minor
                surgery and major surgery premium data when both are delineated the
                rate filings for a specialty. For all other specialties (those that are
                not listed in Table 13) that typically do not distinguish premiums as
                described above, a single risk factor was calculated, and that
                specialty risk factor was applied to all services performed by those
                specialties.
                    This is consistent with prior practice; however, we have refined
                the nomenclature to more precisely describe that some specialties are
                delineated into service risk groups, as is the case for surgical, non-
                surgical, and surgical with obstetrics, and some specialties are not
                further delineated into service risk subgroups and are instead referred
                to as ``All''--meaning that all services performed by that specialty
                receive the same risk factor.
                [GRAPHIC] [TIFF OMITTED] TR15NO19.018
                    Step (3): Calculate a risk factor for each specialty.
                    The relative differences in national average premiums between
                specialties are expressed in our methodology as a specialty-level risk
                factor. These risk factors are calculated by dividing the national
                average premium for each specialty by the national average premium for
                the specialty with the lowest premiums for which we had sufficient and
                reliable data, which remains allergy and immunology (03). For
                specialties with rate filings that are indicative of sufficient
                surgical and non-surgical premium data, we recognized those service-
                risk groups (that is, surgical, and non-surgical) as risk groups of the
                specialty and we calculated both a surgical and non-surgical risk
                factor. 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 factor.
                (a) Technical Component (TC) Only Services
                    We note that for determining the risk factor for suppliers of TC-
                only services in the CY 2015 update, we updated the premium data for
                independent diagnostic testing facilities (IDTFs) that we used in the
                CY 2010 update. Those data were obtained from a survey conducted by the
                Radiology Business Management Association (RBMA) in 2009; we ultimately
                used those data to calculate an updated TC specialty risk factor. We
                applied the updated TC specialty risk factor to suppliers of TC-only
                services. In the CY 2015 PFS final rule with comment period (79 FR
                67595), RBMA voluntarily submitted updated MP premium information
                collected from IDTFs in 2014, and requested that we use those data to
                calculate the CY 2015 MP RVUs for TC-only services. We declined to
                utilize those data and stated that we believe further study is
                necessary and we would consider this matter and propose any changes
                through future rulemaking. We continue to believe that data for a
                broader set of TC-only services are needed, and are working to acquire
                a broader set of data.
                    For CY 2020, we proposed to assign a risk factor of 1.00 for TC-
                only services, which corresponds to the lowest physician specialty-
                level risk factor. We assigned the risk factor of 1.00 to the TC-only
                services because we do not have sufficient comparable professional
                liability premium data for the full range of clinicians that furnish
                TC-only services. In lieu of comprehensive, comparable data, we propose
                to assign 1.00, the lowest physician specialty-level risk factor
                calculated using the updated premium data, as the default minimum risk
                factor. However, we seek information on the most comparable and
                appropriate proxy for the broader set of TC-only services for future
                use, as well as any empirical information that would support assignment
                of an alternative risk factor for these services.
                    Table 14 shows the risk factors by specialty type and service risk
                group.
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                BILLING CODE 4120-01-C
                    We received public comments on the steps for calculating MP RVUs.
                The following is a summary of the comments we received and our
                responses.
                    Comment: Commenters disagreed with our proposal to assign a risk
                factor of 1.00, which is the risk factor of the lowest physician
                specialty, to TC-only services because of insufficient comparable
                professional liability premium data for the full range of health
                professionals that furnish TC-only services. The commenters recommended
                retaining the current RF for TC-only services until comprehensive data
                is acquired rather
                [[Page 62614]]
                than assigning the lowest physician specialty-level risk factor to
                these services. Commenters noted that we should continue to work with
                stakeholders to obtain these data.
                    Response: We reiterate that we have, and will continue to work in
                collaboration with all interested stakeholders to find sufficient
                comparable professional liability data for the full range of clinicians
                that furnish TC-only services. In general, we continue to make progress
                in acquiring premium data as evidenced by the fact that for the CY 2020
                update we collected service-specific premium data for an increasing
                number of specialties, as compared to the CY 2015 update. We note that
                the current RF for TC-only services is 0.91. Although we were able to
                find some data for health professionals that furnish TC-only services,
                we were unable to find sufficient comparable professional liability
                premium data for the full range of health professionals that furnish
                TC-only services. We are finalizing our proposal to assign a RF of
                1.00, which is the RF of the lowest physician specialty (allergy/
                immunology), to TC-only services.
                    Comment: Commenters noted that consistent with the previous update
                CMS continued to assign the RF of the lowest physician specialty to
                NPPs for which there were insufficient or no premium data. We received
                contrasting comments on this proposal. For instance, one commenter was
                supportive of our proposal to continue assigning the risk factor of the
                lowest physician specialty to NPPs for which CMS was unable to collect
                sufficient data. In contrast, a few commenters, including the RUC,
                stated that CMS should not crosswalk NPPs to the lowest physician
                specialty, which is allergy and immunology, and to continue to
                aggressively collect premium data on NPPs.
                    Response: Our efforts to improve the premium data collection for
                NPPs is ongoing. We have made progress in acquiring premium data as
                evidenced by the fact that for the CY 2020 update we collected service-
                specific premium data for an increasing number of specialties, as
                compared to the CY 2015 update, including some NPP specialties, for
                which we previously did not have data that were mapped entirely to
                another specialty. Although we were able to find data for several NPPs
                for which we previously did not have data, we were unable to find
                premium data for the full range of NPPs. Premium data collection for
                NPPs is ongoing and will continue ahead of the next MP RVU update. We
                are finalizing a policy to maintain the current assignment of a RF of
                1.00 for NPP specialties, which corresponds to the lowest physician
                specialty RF, allergy and immunology.
                    Comment: One commenter stated that an alternate option to
                crosswalking NPPs to the lowest physician risk factor of allergy and
                immunology would be to assign them the RF of another NPP specialty for
                which CMS was able to obtain data, the commenter recommended optometry.
                    Response: We reiterate that our proposal was to maintain the
                crosswalk of NPPs for which we had insufficient or no premium data to
                the lowest physician specialty, not to crosswalk NPPs to the RF of a
                NPP for which we were able to collect data. At this time, because we
                were unable to find premium data for the full range of NPPs, we do not
                believe it is appropriate, as suggested by commenters, to assign all
                NPPs for which we had insufficient or no premium data to the RF of
                optometry, another NPP specialty for which we were able to find some
                data. We reiterate that CMS' efforts to improve the premium data
                collection for all NPP specialties is ongoing and will continue ahead
                of the next MP RVU update.
                    Comment: One commenter suggested that the Agency assign codes
                performed predominantly by the select NPPs a 0.00 PLI as their premiums
                are so inconsequential that even a 0.01 PLI overcompensate them for
                their minimal PLI premiums.
                    Response: We disagree that NPPs should be assigned a 0.00 PLI and
                moreover, we disagree that even a 0.01 PLI overcompensate them for
                their minimal PLI premiums. This incorrectly implies that there is zero
                risk for NPPs to provide medical services. We reiterate that although
                we were able to find data for several NPP specialties for which we
                previously did not have data, we were unable to find premium data for
                the full range of NPP specialties. Premium data collection for NPP
                specialties is ongoing and will continue ahead of the next update.
                    Comment: One commenter noted that they previously referenced an
                insurance carrier, Health Providers Service Organization (HPSO)
                (www.hpso.com), as a source of potential premium data for most NPPs.
                This same commenter provided PLI premium data for several NPPs for a
                single state from this source, which ranged from $153 to $1,008.
                    Response: We thank the commenter for their feedback and potential
                data source, as CMS continues efforts to collect premium data on the
                full range of NPP specialties ahead of the next MP RVU update.
                    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 factor 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 factor reflecting the weighted
                MP costs across all specialties furnishing that procedure. The service
                specific risk factor 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.
                    Low volume service codes: As we discussed above in this final rule,
                for low volume services code, we finalized the proposal in the CY 2018
                PFS final rule (82 FR 53000 through 53006) to apply the list of
                expected specialties instead of the claims-based specialty mix for low
                volume services to address stakeholder concerns about the year to year
                variability in PE and MP RVUs for low volume services (which also
                includes no volume services); these are defined as codes that have 100
                allowed services or fewer. These service-level overrides are used to
                determine the 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 2020, we solicited public comment on the list of expected
                specialties. We also noted that the list has been updated to include a
                column indicating if a service is identified as a low volume service
                for CY 2020, and therefore, whether or not the service-level override
                is being applied for CY
                [[Page 62615]]
                2020. The proposed list of codes and expected specialties is available
                on our website under downloads for the CY 2020 PFS proposed rule at
                http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                    We received public comments on the proposed updates to the expected
                specialty list for low volume services. The following is a summary of
                the comments we received and our responses.
                    Comment: Several commenters stated that CMS had indicated that the
                expected specialty list would be updated to include a column specifying
                if a service was identified as a low volume service for CY 2020,
                indicating if the service-level override was being applied for CY 2020.
                However, commenters noted that this additional column did not appear in
                the download version and asked for additional information.
                    Response: We thank the commenters for identifying this missing
                information and we apologize for the technical oversight that caused
                this information not to be displayed for the proposed rule. We are
                finalizing a policy to include this additional column in the public use
                files released with the final rule. Additional comments on the proposed
                updates to the expected specialty list have been addressed in section
                II.B. of this final rule.
                    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 final rule, Determination of Practice Expense Relative Value
                Units, we discuss specialties that are excluded from ratesetting for
                the purposes of calculating PE RVUs. We proposed 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 2020 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. Estimates of the effects on payment by
                specialty type is detailed in section VII. of this final rule, the
                Regulatory Impact Analysis.
                    We received no specific comments regarding our proposal to treat
                excluded specialties in a consistent manner for the purposes of
                calculating MP RVUs, we are finalizing as proposed.
                    Additional information on our methodology for updating the MP RVUs
                is available in the ``Final Report for the CY 2020 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 2020 PFS final
                rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
                    After consideration of the comments, we are finalizing the CY 2020
                update as proposed with minor modifications, as indicated above. We are
                finalizing our proposal to download and use a broader set of filings
                from the largest market share insurers in each state, beyond those
                listed as ``physician'' and ``surgeon'' to obtain a more comprehensive
                data set. We are not finalizing our proposal to combine minor and major
                surgery premiums when both are delineated on rate filings for a
                specialty nor are we finalizing our proposal to use a physician work
                RVU of greater than 5.00, as a threshold to identify surgical services
                as major surgery (or to categorize surgical services under 5.00 as
                minor surgery). Instead, we are finalizing a policy to develop RFs by
                maintaining the current methodology to only use major surgery premium
                data when both minor surgery and major surgery are delineated on rate
                filings for a specialty, and to use the minor surgery premium data when
                it is the only premium type in the rate filings for a specialty. We are
                finalizing a policy to map risk factors for cardiac electrophysiology
                to the risk factor for cardiology (surgery) and cardiology (no
                surgery). We are finalizing our proposal to assign the RF of the lowest
                physician specialty (allergy/immunology) to TC-only services, which is
                a RF of 1.00. We are finalizing a policy to maintain assigning the
                current RF of the lowest physician specialty (allergy/immunology),
                which is a RF of 1.00 to NPP specialties. We are finalizing our
                proposal to include an additional column on the anticipated low volume
                specialty list which specifies if a service was identified as a low
                volume service for CY 2020, indicating if the service-level override
                was being applied for CY 2020. We are finalizing our proposal to treat
                excluded specialties in a consistent manner for the purposes of
                calculating MP RVUs.
                D. Geographic Practice Cost Indices (GPCIs)
                1. Background
                    Section 1848(e)(1)(A) of the Act requires us to develop separate
                Geographic Practice Cost Indices (GPCIs) to measure 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 provided for a 1.0 floor
                for the work GPCIs, which was set to expire at the end of 2017. Section
                50201 of the Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-
                123,
                [[Page 62616]]
                enacted February 9, 2018) amended the statute to extend the 1.0 floor
                for the work GPCIs through CY 2019 (that is, for services furnished no
                later than December 31, 2019).
                    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 adjustment shall be \1/2\ of
                the adjustment that otherwise would be made. Therefore, since the
                previous GPCI update was implemented in CYs 2017 and 2018, we proposed
                to phase in \1/2\ of the latest GPCI adjustment in CY 2020.
                    We have completed a review of the GPCIs and are finalizing new
                GPCIs in this final rule. We also calculate a geographic adjustment
                factor (GAF) for each PFS locality. The GAFs are a weighted composite
                of each PFS locality's 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 useful in
                comparing overall areas costs and payments. The actual effect 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 of the GAF.
                    As noted above, section 50201 of the BBA of 2018 extended the 1.0
                work GPCI floor for services furnished only through December 31, 2019.
                Therefore, the final CY 2020 work GPCIs and summarized GAFs do not
                reflect the 1.0 work floor. However, 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, applicable in CY 2020. See Addenda D and E to this final
                rule for the CY 2020 final GPCIs and summarized GAFs available on the
                CMS website under the supporting documents section of the CY 2020 PFS
                final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
                2. Payment Locality Background
                    Prior 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 locality
                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 Update
                    As 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). 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 2020 GPCI update is available in a final report,
                ``Final Report for the CY 2020 Update of GPCIs and MP RVUs for the
                Medicare PFS,'' on our website located under the supporting documents
                section for the CY 2020 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
                a. Work GPCIs
                    The 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 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
                [[Page 62617]]
                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; and 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.
                    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
                2020 GPCI update, we used updated BLS OES data (2014 through 2017) as a
                replacement for the 2011 through 2014 data to compute the work GPCIs.
                b. Practice Expense (PE) GPCIs
                    The 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 2017), we
                used 2011 through 2014 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 CY 2020 GPCI update, we used updated BLS
                OES data (2014 through 2017) as a replacement for the 2011 through 2014
                data for purposes of calculating the employee wage component and
                purchased service index component of the PE GPCI. In calculating the CY
                2020 GPCI update, for the office rent index component of the PE GPCI we
                used the most recently available, 2013 through 2017, American Community
                Survey (ACS) 5-year estimates as a replacement for the 2009 through
                2013 ACS data.
                c. Malpractice Expense (MP) GPCIs
                    The MP GPCIs measure the relative cost differences among PFS
                localities for the purchase of professional liability insurance (PLI).
                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 2017 GPCI update, we used 2014 and 2015 malpractice premium
                data. The CY 2020 MP GPCI update reflects premium data presumed in
                effect as of December 30, 2017. 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.
                d. GPCI Cost Share Weights
                    For CY 2020 GPCIs, we proposed to continue to use the current cost
                share weights for determining the PE GPCI values and locality GAFs. 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 GPCI update.
                    The GPCI cost share weights for CY 2020 are displayed in Table 15.
                    [GRAPHIC] [TIFF OMITTED] TR15NO19.021
                
                [[Page 62618]]
                e. PE GPCI Floor for Frontier States
                    Section 10324(c) of the Affordable Care Act added a new
                subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0
                PE GPCI floor for physicians' services furnished in frontier states
                effective January 1, 2011. In accordance with section 1848(e)(1)(I) of
                the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for
                physicians' services furnished in states determined to be frontier
                states. 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 2020 PFS final 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 2020.
                f. Methodology for Calculating GPCIs in the U.S. Territories
                    Prior 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 Locality Update to the Fee Schedule Areas Used for
                Payment Under Section 220(h) of the Protecting Access to Medicare Act
                    Section 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 localities 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 localities
                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 consideration.
                    Section 1848(e)(6)(D) of the Act defined transition areas as the
                fee schedule areas for 2013 that were 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 are 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
                represents the fourth year, the applicable GPCI values for counties
                that were previously in rest-of-state or locality 3 and are now in MSAs
                are 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 continue to shift by \1/6\ in each
                subsequent year so that, by CY 2021, the applicable GPCI values for
                counties within transition areas are 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 are the values calculated solely under the
                new MSA-based locality structure. For clarity, we reiterate that this
                incremental phase-in is only applicable to those counties that are in
                transition areas that are now in MSAs, which are only some of the
                counties in the 2013 California rest-of state locality and locality 3.
                    Additionally, section 1848(e)(6)(C) of the Act establishes a hold
                harmless 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 a total of 58 counties in California, 50 of which are in transition
                areas as defined in section 1848(e)(6)(D) of the Act. The eight
                counties that are not within transition areas are: Orange; Los Angeles;
                Alameda; Contra Costa; San Francisco; San Mateo; Santa Clara; and
                Ventura counties.
                    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 localities 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 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 implemented 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 previous 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. However, since section 1848(e)(6)(B) of the Act provides for a
                gradual phase in of the GPCI values under the new MSA-based locality
                structure for California, specifically in one-sixth increments over 6
                years, if we were to also apply the requirement to phase in \1/2\ of
                the adjustment in year 1 of the GPCI update then the first year
                increment would effectively be 1/12.
                [[Page 62619]]
                Therefore, in CY 2017, we finalized a policy that the requirement at
                section 1848(e)(1)(C) of the Act to phase in \1/2\ of the adjustment in
                year 1 of the GPCI update would not apply to counties that were
                previously in the rest-of-state or locality 3 and are now in MSAs that
                are subject to the blended phase-in as described above in this section.
                We reiterate that this is only applicable through CY 2021 since,
                beginning in CY 2022, the GPCI values for such areas in an MSA would be
                fully based on the values calculated under the new MSA-based locality
                structure for California. 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).
                h. Refinements to the GPCI Methodology
                    In the process of calculating GPCIs for the purposes of this final
                rule, we identified two technical refinements to the methodology that
                yield improvements over the current method; these refinements are
                applicable to the work GPCI and the employee wage index and purchased
                services index components of the PE GPCI. We proposed to weight by
                total employment when computing county median wages for each occupation
                code which addresses the fact that the occupation wage can vary by
                industry within a county. Additionally, we proposed to use a weighted
                average when calculating the final county-level wage index; this
                removes the possibility that a county index would imply a wage of 0 for
                any occupation group not present in the county's data. These
                methodological refinements yield improved mathematical precision.
                Additional information on the GPCI methodology and the refinements are
                available in the final report, ``Final Report for the CY 2020 Update of
                GPCIs and MP RVUs for the Medicare PFS'' on our website located under
                the supporting documents section of the CY 2020 PFS final rule at
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
                i. Proposed GPCI Update Summary
                    As explained above in the Background section above in this section,
                the periodic review and adjustment of GPCIs is mandated by section
                1848(e)(1)(C) of the Act. At each update, the GPCIs are published in
                the PFS proposed rule to provide an opportunity for public comment and
                further revisions in response to comments prior to implementation. The
                CY 2020 updated GPCIs 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
                final rule available on our website under the supporting documents
                section of the CY 2020 PFS final rule web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
                    The following is a summary of the comments we received on the GPCI
                proposals and our responses.
                    Comment: A few commenters expressed concern over the expiring work
                GPCI floor of 1.0. Some of the commenters stated an objection to any
                proposals that could have a negative impact on rural areas such as the
                expiration of the work GPCI floor and stated that the GPCIs needs to
                account for the unique practice needs of rural providers.
                    Response: The 1.0 work GPCI floor is established by statute and
                expires on December 31, 2019. We do not have the authority to extend
                the 1.0 work GPCI floor beyond December 31, 2019. We note that 34
                states have a statewide payment locality, which means that physicians,
                whether in urban or rural areas, receive the same geographic adjustment
                thus reducing rural/urban payment differentials within a state.
                    Comment: A few commenters expressed support for the elimination of
                all GAFs under the PFS, except those designed to achieve a specific
                public policy goal, such as to encourage physicians to practice in
                underserved areas. The commenters stated that GPCIs tend to favor urban
                localities over their rural counterparts and works at cross purposes to
                the health professional shortage area (HPSA) bonus and other incentives
                intended to encourage and support rural physicians. The commenters also
                stated that rural beneficiaries would be better served if the GPCIs
                were eliminated from the PFS so that the HPSA bonus and other
                incentives are not undermined in their efforts to sustain the rural
                physician workforce needed to care for those beneficiaries.
                    Response: As previously discussed, section 1848(e)(1)(A) of the Act
                requires us to develop separate GPCIs to measure resource cost
                differences among localities compared to the national average for each
                of the three GPCI components, and section 1848(e)(1)(C) of the Act
                requires us to review and, if necessary, adjust the GPCIs at least
                every 3 years; and based on new data GPCI values may increase or
                decrease. Additionally, as noted above, 34 states have a statewide
                locality, thus reducing rural/urban payment differentials within a
                state.
                    Comment: One commenter stated that CMS uses salary data for
                individuals with 5 or more years of college, and should instead
                evaluate the feasibility of using salary data only from individuals
                with graduate degrees in the work GPCI calculations. The commenter also
                stated that CMS should also consider that physicians invest a portion
                of their compensation in the practice and that portion should not be
                counted as salary.
                    Response: We note that physicians are not one of the seven
                occupation groups used in the work GPCI calculation; therefore, we are
                unclear about the commenter's assertion that investments of a portion
                of a physician's salary back into the practice should not be counted as
                salary. As described above, and consistent with our longstanding
                practice, a set of occupation groups representing a variety of
                professionals are used in the calculation. We note that the proxy
                occupations currently used represent highly educated professional
                occupation categories, and therefore, we believe we are already
                including salary data for individuals with advanced degrees.
                    Comment: One commenter stated concern that the work GPCI does not
                utilize actual physician wage data, and states that CMS' statement that
                including physician wage data in calculating the work GPCI would
                potentially introduce some circularity to the adjustment since Medicare
                payments typically contribute to physician wages is flawed. The
                commenter stated that in the era of increasing physician employment,
                more physicians receive a salary dependent upon local market conditions
                and not the portion of their patient panel on Medicare. The commenter
                also stated that two of the proxy professional wage categories--
                pharmacists, and registered nurses--are professions whose wages are
                also comprised, in part, of income gained from participation in the
                Medicare program.
                    Response: We note that we have long maintained that including
                physicians' wages in the physician work GPCI would, in effect make the
                physician work GPCI to some extent dependent upon Medicare payments
                which in turn are impacted by the indices. We do not dispute the
                assertion that local market conditions may also play a role in
                determination of a physician's salary; however, we do not believe that
                mitigates the potential for circularity and maintain that, still,
                Medicare payment is a significant determinant of physician's earnings.
                We also recognize that the seven proxy professional wage
                [[Page 62620]]
                categories span several different industries, including pharmacists,
                and registered nurses which demonstrates that the healthcare industry
                is represented in those proxy wage categories; however, physicians in
                particular are not included in those categories as previously
                described. We continue to believe in the majority of instances, the
                earnings of physicians will vary among areas to the same degree that
                the earnings of other professionals across an array of industries vary.
                We reiterate that the work GPCI is not an absolute measure of physician
                earnings, rather it is a measure of the relative wage differences for
                each locality as compared to the national average. Additionally, the
                work GPCI reflects only one quarter of those relative wage differences
                consistent with the statutory requirement as discussed previously in
                this section.
                    Comment: A few commenters stated that CMS should re-evaluate
                existing databases to find or develop a nationwide measure of
                commercial office rents for use in calculating PE GPCIs. One commenter
                stated that CMS should either collect true medical office expense data
                or alternatively use data sources available to federal agencies such as
                office expense data from the Federally Qualified Health Center Network.
                    Response: We appreciate the commenter's feedback. We note 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. Further, we welcome
                opportunities to discuss such data sources with stakeholders and to
                incorporate such data, as appropriate in the GPCI calculation process,
                through our standard annual rulemaking process.
                    Comment: One commenter expressed support for the proposed
                methodological refinements and stated that it could yield improvements
                that would be beneficial to all fields of medicine.
                    Response: We thank the commenter for the support of our proposed
                methodological refinements.
                    Comment: A few commenters stated that the proposed refinement to
                the weighting of the physician work, employee wage, and purchased
                services indices results in inconsistent comparisons of occupational
                wages from one county to the next, because industry wages within an
                occupational group will vary from one county to the next based on
                employment. The commenters recommended using the previous methodology
                and also stated that for counties with zero inputs that we use inputs
                from MSAs as is done for the rent index or use the national average as
                used in the previous update.
                    Response: The use of employment weights better captures variation
                in median wages themselves, which is exactly what the indices are meant
                to reflect. As the commenter indicated, the unweighted approach
                captures variation in wages reported by category in an index-like
                manner. This is undesirable both substantively and mathematically,
                since it makes the GPCIs an index based on an index rather than on the
                underlying data of interest. We have reviewed the process for
                developing county-level median wages as described in the proposed rule,
                and continue to believe that the use of employment weights, as we
                proposed, is an improvement over the use of unweighted values as
                requested by the commenter. We intend to continue considering how
                measures are weighted and summarized throughout the GPCI development
                process and will invite public comment on any additional potential
                improvements we identify through future rulemaking.
                    Comment: A few commenters stated that they find it challenging to
                extract and collate the publicly-available BLS OES data (available from
                the BLS website), that are used for the work and PE GPCIs in a manner
                that enables them to reproduce the data sets used in the work GPCI and
                the employee wages, and purchased services components of the PE GPCI;
                the commenters stated that CMS should provide more detailed information
                in the interest of transparency.
                    Response: We note that we provide web links to the publicly-
                available data sources used in this GPCI update, the methodological
                parameters, as well as an overview of how we develop each GPCI
                component in the final report for the CY 2020 Update of GPCIs and MP
                RVUs for the Medicare PFS. This practice is consistent with previous
                updates. However, in consideration of the commenters' concerns that
                navigating the publicly-available BLS OES data on the BLS website is
                cumbersome, we have included more detailed steps in the aforementioned
                report to further assist interested parties in navigating these data.
                    Comment: One commenter stated that the GPCIs in Hawaii do not
                account for the unique costs of providing medical services in Hawaii
                and that this will lead to an accelerating shortage of health care
                providers across the state of Hawaii. The commenter stated that
                Hawaii's unique geography makes providing care more expensive and that
                the cost of living ranks amongst the highest in the nation, and the
                data used by CMS do not reflect the cost of living. The commenter
                stated that it disputes the assertion that the equipment, supplies, and
                miscellaneous expenses component of the PE GPCI do not vary by
                geographic area, and therefore, do not require updating. The commenter
                stated that the high cost of shipping equipment plays a major part in
                the high cost of healthcare in Hawaii and the PEs should reflect that
                additional cost that exists in Hawaii and not in the mainland United
                States. The commenter stated that the 1.5 work GPCI floor for Alaska,
                and the 1.0 PE GPCI floor for the frontier states should serve as a
                basis for reevaluating the cost of providing medical services in
                Hawaii. The commenter stated that the GPCIs should be adjusted to
                reflect a factor at least equal to Alaska's work GPCI.
                    Response: We reiterate that the GPCIs, in particular the work GPCI
                and the PE GPCI to which the commenter refers, are based on nationally-
                representative and publicly-available wage data from the BLS OES for
                the work GPCI and employee wage and purchased services components of
                the PE GPCI, and the Census Bureau's ACS data for the rent index
                component of the PE GPCI. The GPCIs are a measure of relative resource
                cost differences among localities compared to the national average as
                informed by the data (not a measure of absolute costs). With regards to
                the supplies, equipment, and miscellaneous expense cost index component
                of the PE GPCIs, we have stated that we believe there is a national
                market for these items and there is not significant geographic
                variation in those costs, and as such we assign a value of 1.00 for
                this component for each locality, consistent with the national average.
                Stakeholders have previously indicated that shipping and transportation
                expenses increase the cost of acquiring medical equipment and supplies
                in islands relative to the mainland. We have previously attempted to
                locate data sources specific to geographic variation in shipping costs,
                and we found no comprehensive national data source for this
                information, and therefore, we have not been able to quantify variation
                in costs specific to islands as indicated by the commenter (we refer
                readers to 78 FR 74387 through 74388 for a detailed discussion of this
                issue). The commenter did not provide any data to quantify the
                variation. We would encourage the commenter and other stakeholders to
                submit data supporting this assertion for consideration in future
                rulemaking; specifically, we would be
                [[Page 62621]]
                interested in information regarding potential data sources for shipping
                costs for medical equipment and supplies that are accessible to the
                public, available on a national basis for both urban and rural areas,
                and updated regularly. We remind commenters that the work GPCI value
                for Alaska is not based on the data for that state, instead section
                1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI floor for
                Alaska. Similarly, section 1848(e)(1) of the Act sets a permanent PE
                GPCI floor of 1.0 for the frontier states. Additionally, we note that
                the GAF in Hawaii, displayed in Addendum D, which represents the
                weighted composite of each PFS localities GPCIs, is increasing in the
                GPCI update from CY 2019 to years 1 and 2 of the update (CY 2020 and CY
                2021).
                    Comment: One commenter noted that the MP GPCIs changed more
                significantly than other GPCIs, but also acknowledged that MP accounts
                for a small share of average total payments so these swings generally
                translate into modest payment changes. The commenter urged CMS to give
                consideration to comments from state medical associations and other
                organizations representing physicians who practice in localities facing
                reductions to ensure that the data driving reductions are accurate.
                    Response: We note that larger changes in MP GPCI values in an
                update year are not unprecedented, and the commenter has correctly
                characterized that changes in MP will equate to minimal changes in
                payment because MP represents a small share of average total payments.
                As discussed in section II.C of this final rule, there were several
                proposed methodological refinements in the development of the MP
                premium data which underlies the MP risk factors used in determining
                both MP RVUs and MP GPCIs which has also contributed to some of the
                changes; we note that not all of those proposed methodological
                refinements were finalized for CY 2020, and the final MP GPCIs in
                Addendum E of this final rule are reflective of that.
                    We emphasize that we do give consideration to the public comments
                that we receive. We note that only a few comments were received with
                regards to the GPCI proposals, though during the process of developing
                the CY 2020 final rule GPCIs, which includes reviewing the underlying
                data (which are obtained from publicly-available sources as previously
                discussed) and reviewing our programming, we did observe the following
                issue. The work, PE, and MP GPCIs are based on the 2017 utilization
                data as described in the final report for the CY 2020 Update of GPCIs
                and MP RVUs for the Medicare PFS. These data became available after the
                CY 2020 PFS proposed rule analytic programs had been written for these
                measures, but for the purposes of developing the analytic programs the
                CY 2016 utilization data were used as a placeholder. During the final
                rule development we realized an oversight whereby the 2016 utilization
                data had not been replaced with the 2017 utilization data for the work
                and PE GPCIs, though we note that for the MP GPCI, the 2017 utilization
                data were being used. We have resolved this issue for the final rule
                and all 3 GPCI components reflect the updated 2017 utilization data as
                described in the aforementioned report. We note that utilization data
                are highly correlated year to year so the effect of this change on
                final GPCI values was quite modest; specifically, the updated
                utilization data had virtually no effect on the resulting work, PE, and
                MP GPCIs and the GAFs. Outside of California (see below for a
                discussion regarding California), the correlation coefficient between
                each of the three GPCIs and the GAF in the proposed rule, and their
                corresponding values in the final rule is 0.999.
                    Comment: A few commenters expressed concern with regards to the
                county rent indices delineated in the county-level data public use file
                whereby they noted consistent discrepancies in New England states as
                compared to the rest of the country. The commenters stated that before
                finalizing the PE GPCIs, CMS should review the indices to ensure that
                the relative differences in the indices accurately reflect the relative
                differences in rents from the source data file. One of the commenters
                indicated that this issue is not observed in any areas outside of New
                England.
                    Response: We note that during the review of the underlying data and
                analytic programs for the final rule, we identified an issue with the
                data in New England (Maine, New Hampshire, Vermont, Massachusetts,
                Rhode Island, and Connecticut) where the raw data values were defined
                at sub-county areas in New England, but were not summarized to the
                county-level in the development of the proposed CY 2020 GPCI values.
                This led to distorted office rent index values for the six states in
                New England, which in turn affected the proposed PE GPCIs in those
                states. The CY 2020 PFS final rule office rent index that underlies the
                PE GPCI has been corrected so that the input data element is now
                summarized at the county-level before being used to develop the index.
                Similar to the aforementioned update to the utilization data, the
                corrected mapping of raw data values in New England as described above
                had virtually no effect on the resulting work, PE, and MP GPCIs and the
                GAFs. Outside of California (see below for a discussion regarding
                California), the correlation coefficient between each of the three
                GPCIs and the GAF in the proposed rule, and their corresponding values
                in the final rule is 0.999.
                    Comment: One commenter expressed concern with the implementation of
                the GPCI requirements in California consistent with section 1848(e)(6)
                of the Act which was implemented in the CY 2017 PFS final rule (81 FR
                80261 through 80270). The commenter requested that CMS remedy any
                errors in the GPCI values. Specifically, the commenter indicated that
                CMS did not accurately implement the California MSA-based structure in
                the CY 2020 PFS proposed rule consistent with the methodology finalized
                in CY 2017 based on the requirements of the statute. The commenter
                specifically highlighted issues with the GPCIs for the San Francisco-
                Oakland-Hayward localities (localities 05, 06, 07, and 53); the San
                Jose-Sunnyvale-Santa Clara localities (localities 09, and 65); and the
                Los Angeles-Long Beach-Anaheim localities (localities 26, and 18). The
                commenter provided their analysis with their commenter letter, and
                stated that based on their findings, the proposed GPCIs for the nine
                counties contained in the eight aforementioned localities are
                inaccurate. The commenter also requested that CMS provide the
                traditional source data for the PE rent and wage indices or the
                relative value units (RVUs) by county that have been published in the
                past. Aside from the issues with these eight localities as described
                above, the commenter indicated that for the remaining California
                localities, they support and agree with the proposed GPCIs and commend
                CMS for accurately completing the difficult calculations as required by
                statute.
                    Response: We appreciate the analysis provided by the commenter with
                regards to the eight aforementioned localities and thank the commenter
                for bringing this to our attention. We agree with the commenter that
                there were issues with the calculation of the GPCI values reflected in
                the CY 2020 PFS proposed rule for California. In the programming, we
                inadvertently used the 32 MSA-based localities for which current GPCIs
                are defined to account for different treatment of some counties within
                MSAs when creating the new GPCIs, as opposed to using the 27 MSA-based
                localities to determine the new MSA-based payment area GPCI amounts.
                Additionally, we identified a
                [[Page 62622]]
                sequencing issue in our programming that led to issues in establishing
                the transition values and applying the hold harmless provision. We
                apologize for the confusion caused by these issues and have resolved
                these programming issues and recalculated the California GPCIs. The
                final CY 2020 GPCI values in California reflect the transition and hold
                harmless provisions executed in the proper order based on the
                requirements of the law. In summary, in California the issue was the
                level of aggregation used to create the proposed rule values, which
                erroneously resulted in different proposed rule values for counties
                within payment localities where there should not be any differences.
                Correcting this, along with other changes in the final rule relative to
                the proposed rule, led to GAFs that are higher in all but three of the
                32 payment localities in California. In those three, the GAF is lower
                because it is now correctly equal among non-transition counties within
                the new MSA-based payment areas; these three counties had higher values
                when erroneously calculated as individual payment localities in the
                proposed rule than they have when correctly averaged within the MSA for
                the final rule GPCIs. The final rule GAFs for these three areas are
                lower than those published in the proposed rule by 0.1 percent in
                locality 26 (Los Angeles-Long Beach-Anaheim (Orange cty)), 1.4 percent
                in locality 05 (San Francisco-Oakland-Hayward (San Francisco cty)), and
                1.8 percent in locality 06 (San Francisco-Oakland-Hayward (San Mateo
                cty)), but all three localities have CY 2020 PFS final rule GAFs that
                are higher than their current CY 2019 values. In the other 29
                California payment localities, the increase in final rule GAFs relative
                to the proposed rule values ranges from 0.5 percent to 6.2 percent,
                with 13 areas experiencing an increase of 1.2 percent.
                    Additionally, we note that we have provided a county-level GPCI
                data file as one of the GPCI public use files in the downloads section
                of the CY 2020 PFS final rule on the CMS website, that delineates the
                requested source data, as well as the RVUs by county, consistent with
                what has been published in the past. We reiterate that the county-level
                data file also reflects the correction to the oversight in the proposed
                rule whereby we inadvertently used the 2016 utilization data for the
                work and PE GPCIs (though we correctly used the 2017 utilization data
                for the MP GPCIs) as previously discussed.
                    Comment: One commenter stated that for CY 2020 in California there
                should be 29 distinct fee schedule areas and not 32 fee schedule areas
                as finalized when this provision was implemented in CY 2017. The
                commenter stated that some of the distinct fee schedule areas that were
                used during the period between CY 2017 and CY 2018 are no longer
                necessary. The commenter stated that Orange and Los Angeles counties,
                which are both in the Los-Angeles-Long Beach-Anaheim MSA, should have
                the same GPCI values and be one locality number instead of two.
                Similarly, Alameda, Contra Cosa, San Francisco and San Mateo counties
                (all in the San Francisco-Oakland-Hayward MSA) should be identified by
                one locality number instead of three, and the San Francisco-Oakland-
                Hayward (Marin cnty) locality would remain its own distinct locality
                number.
                    Response: There are 27 MSAs in California, and when CMS implemented
                the MSA-based locality structure for California as discussed above, for
                operational considerations, we finalized 32 unique MSA-based locality
                numbers. We did not propose to make changes to the number of unique
                locality numbers for California for CY 2020. Since two of the MSAs that
                required multiple unique locality numbers (San Francisco-Oakland-
                Hayward, and San Jose-Sunnyvale-Santa Clara) to address operational
                considerations as described in the CY 2017 PFS final rule (81 FR 80265
                through 80268) contain both transition and non-transition counties, we
                would still need to maintain some unique locality numbers. We remind
                the commenter that though starting in CY 2022, the applicable GPCIs for
                counties in transition areas will be calculated solely under the MSA-
                based locality structure as described above, the statutorily-required
                hold-harmless provision for counties in transition areas is permanent.
                    With regards 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 the Los Angeles-Long
                Beach-Anaheim MSA only needed separate unique locality numbers, for
                payment purposes, in year 1 (CY 2017) of the implementation of the MSA-
                based structure as neither of the counties in the MSA (Orange nor Los
                Angeles counties) are transition counties (and therefore, are not
                subject to aforementioned the one-sixth incremental phase-in nor hold-
                harmless provision). We will consider the feasibility of assigning one
                locality number for that MSA in future rulemaking since there will be
                no difference in the GPCI values, for payment purposes, for those
                localities going forward. Similarly, the San Francisco-Oakland-Hayward
                MSA contains four counties (across three unique locality numbers: 05,
                06, and 07) that are not transition areas and will receive the same
                GPCI values, for payment purposes, going forward (San Francisco, San
                Mateo, Alameda, and Contra Costa counties). As such, we will consider
                the feasibility of collapsing those three unique locality numbers and
                assigning one unique locality number in future rulemaking. If we
                determine that to be operationally feasible, we would propose any
                changes in future rulemaking. We note that it would ultimately change
                the number of distinct fee schedule areas needed, for payment purposes,
                in California from 32 to 29 as suggested by the commenter.
                    Additionally, during the development of the CY 2020 PFS final rule
                GPCIs, we identified typographical errors in the naming conventions of
                four of the California MSA-based localities in Addendum D and Addendum
                E: Locality 05-San Francisco-Oakland-Hayward (San Francisco cnty) was
                listed as San Francisco; locality 06-San Francisco-Oakland-Hayward (San
                Mateo cnty) was listed as San Mateo; locality 07-San Francisco-Oakland-
                Hayward (Alameda/Contra Costa cnty) was listed as Oakland/Berkeley; and
                San Jose-Sunnyvale-Santa Clara (Santa Clara cnty) was listed as Santa
                Clara. This display issue has been corrected in Addendum D and Addendum
                E for the final rule.
                    Comment: One commenter stated that it believes large cuts to rural
                and rest-of-state areas should be avoided or minimized, but locality
                boundaries with large payment differences should not be in the middle
                of urban areas, because they create payment cliffs where payment can
                change if an office is moved across a street or down a block. The
                commenter stated that CMS should create locality definitions that are
                not constrained by county boundaries, and advocated implementing
                locality definitions based on Metropolitan Statistical Areas.
                    Response: We appreciate the suggestions for revisions to the PFS
                locality structure; however, we did not propose any changes to the PFS
                locality structure and decline to do so at this time. Further, we
                clarify that just as the localities under the locality structure used
                in the PFS are comprised of one or more constituent counties, so are
                Metropolitan Statistical Areas. Therefore, the concept of a payment
                cliff between neighboring counties as described by the commenter would
                not necessarily be mitigated by a change from PFS fee schedule areas to
                Metropolitan Fee Schedule Areas.
                [[Page 62623]]
                    After consideration of the comments, we are finalizing the CY 2020
                GPCI update, and the methodological refinements as proposed. The final
                GPCIs and summarized GAFs in Addenda D and E to this final rule also
                reflect the correction of the underlying programming issues described
                above.
                E. Potentially Misvalued Services Under the PFS
                1. Background
                    Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a
                periodic review, not less often than every 5 years, of the 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.N. of this final rule, Valuation of
                Specific Codes, each year we develop appropriate adjustments to the
                RVUs taking into account recommendations provided by the RUC, MedPAC,
                and other stakeholders. For many years, the RUC has provided us with
                recommendations on the appropriate relative values for new, revised,
                and potentially misvalued PFS services. We review these recommendations
                on a code-by-code basis and consider these recommendations in
                conjunction with analyses of other data, such as claims data, to inform
                the decision-making process as authorized by law. We may also consider
                analyses of work time, work RVUs, or direct PE inputs using other data
                sources, such as Department of Veteran Affairs (VA), National Surgical
                Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons
                (STS), and the Merit-based Incentive Payment System (MIPS) data. In
                addition to considering the most recently available data, we assess the
                results of physician surveys and specialty recommendations submitted to
                us by the RUC for our review. We also consider information provided by
                other stakeholders. We conduct a review to assess the appropriate RVUs
                in the context of contemporary medical practice. We note that section
                1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and
                other techniques to determine the RVUs for physicians' services for
                which specific data are not available and requires us to take into
                account the results of consultations with organizations representing
                physicians who provide the services. In accordance with section 1848(c)
                of the Act, we determine and make appropriate adjustments to the RVUs.
                    In its March 2006 Report to the Congress (http://www.medpac.gov/docs/default-source/reports/Mar06_Ch03.pdf?sfvrsn=0), MedPAC discussed
                the importance of appropriately valuing physicians' services, noting
                that misvalued services can distort the market for physicians'
                services, as well as for other health care services that physicians
                order, such as hospital services. In that same report, MedPAC
                postulated that physicians' services under the PFS can become misvalued
                over time. MedPAC stated, ``When a new service is added to the
                physician fee schedule, it may be assigned a relatively high value
                because of the time, technical skill, and psychological stress that are
                often required to furnish that service. Over time, the work required
                for certain services would be expected to decline as physicians become
                more familiar with the service and more efficient in furnishing it.''
                We believe services can also become overvalued when PE declines. 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 rises.
                    As MedPAC noted in its March 2009 Report to Congress (http://www.medpac.gov/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf), in the intervening years since
                MedPAC made the initial recommendations, CMS and the RUC have taken
                several steps to improve the review process. Also, section
                1848(c)(2)(K)(ii) of the Act augments our efforts by directing the
                Secretary to specifically examine, as determined appropriate,
                potentially misvalued services in the following categories:
                     Codes that have experienced the fastest growth.
                     Codes that have experienced substantial changes in PE.
                     Codes that describe new technologies or services within an
                appropriate time period (such as 3 years) after the relative values are
                initially established for such codes.
                     Codes which are multiple codes that are frequently billed
                in conjunction with furnishing a single service.
                     Codes with low relative values, particularly those that
                are often billed multiple times for a single treatment.
                     Codes that have not been subject to review since
                implementation of the fee schedule.
                     Codes that account for the majority of spending under the
                PFS.
                     Codes for services that have experienced a substantial
                change in the hospital length of stay or procedure time.
                     Codes for which there may be a change in the typical site
                of service since the code was last valued.
                     Codes for which there is a significant difference in
                payment for the same service between different sites of service.
                     Codes for which there may be anomalies in relative values
                within a family of codes.
                     Codes for services where there may be efficiencies when a
                service is furnished at the same time as other services.
                     Codes with high intraservice work per unit of time.
                     Codes with high PE RVUs.
                     Codes with high cost supplies.
                     Codes as determined appropriate by the Secretary.
                    Section 1848(c)(2)(K)(iii) of the Act also specifies that the
                Secretary may use existing processes to receive recommendations on the
                review and appropriate adjustment of potentially misvalued services. In
                addition, the Secretary may conduct surveys, other data collection
                activities, studies, or other analyses, as the Secretary determines to
                be appropriate, to facilitate the review and appropriate adjustment of
                potentially misvalued services. This section also authorizes the use of
                analytic contractors to identify and analyze potentially misvalued
                codes, conduct surveys or collect data, and make recommendations on the
                review and appropriate adjustment of potentially misvalued services.
                Additionally, this section provides that the Secretary may coordinate
                the review and adjustment of any RVU with the periodic review described
                in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of
                the Act specifies that the Secretary may make appropriate coding
                revisions (including using existing processes for consideration of
                coding changes) that may include consolidation of individual services
                into bundled codes for payment under the PFS.
                2. Progress in Identifying and Reviewing Potentially Misvalued Codes
                    To fulfill our statutory mandate, we have identified and reviewed
                numerous
                [[Page 62624]]
                potentially misvalued codes as specified in section 1848(c)(2)(K)(ii)
                of the Act, and we intend to continue our work examining potentially
                misvalued codes in these areas over the upcoming years. As part of our
                current process, we identify potentially misvalued codes for review,
                and request recommendations from the RUC and other public commenters on
                revised work RVUs and direct PE inputs for those codes. The RUC,
                through its own processes, also identifies potentially misvalued codes
                for review. Through our public nomination process for potentially
                misvalued codes established in the CY 2012 PFS final rule with comment
                period, other individuals and stakeholder groups submit nominations for
                review of potentially misvalued codes as well. Individuals and
                stakeholder groups may submit codes for review under the potentially
                misvalued codes initiative to CMS in one of two ways. Nominations may
                be submitted to CMS via email or through postal mail. Email submissions
                should be sent to the CMS emailbox
                [email protected], with the phrase ``Potentially
                Misvalued Codes'' in the subject line. Physical letters for nominations
                should be sent via the U.S. Postal Service to the Centers for Medicare
                and Medicaid Service, Mail Stop: C4-01-26, 7500 Security Blvd.,
                Baltimore, Maryland 21244. Envelopes containing the nomination letters
                must be labeled ``Attention: Division of Practitioner Services,
                Potentially Misvalued Codes''. Nominations for consideration in our
                next annual rule cycle should be received by our February 10th
                deadline. Since CY 2009, as a part of the annual potentially misvalued
                code review and Five-Year Review process, we have reviewed over 1,700
                potentially misvalued codes to refine work RVUs and direct PE inputs.
                We have assigned appropriate work RVUs and direct PE inputs for these
                services as a result of these reviews. A more detailed discussion of
                the extensive prior reviews of potentially misvalued codes is included
                in the Medicare Program; Payment Policies Under the Physician Fee
                Schedule, Five-Year Review of Work Relative Value Units, Clinical
                Laboratory Fee Schedule: Signature on Requisition, and Other Revisions
                to Part B for CY 2012; Final Rule (76 FR 73052 through 73055)
                (hereinafter referred to as the ``CY 2012 PFS final rule with comment
                period''). In the CY 2012 PFS final rule with comment period (76 FR
                73055 through 73958), we finalized our policy to consolidate the review
                of physician work and PE at the same time, and established a process
                for the annual public nomination of potentially misvalued services.
                    In the Medicare Program; Revisions to Payment Policies Under the
                Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of the
                Requirement for Termination of Non-Random Prepayment Complex Medical
                Review and Other Revisions to Part B for CY 2013 (77 FR 68892)
                (hereinafter referred to as the ``CY 2013 PFS final rule with comment
                period''), we built upon the work we began in CY 2009 to review
                potentially misvalued codes that have not been reviewed since the
                implementation of the PFS (so-called ``Harvard-valued codes''). In the
                Medicare Program; Revisions to Payment Policies Under the Physician Fee
                Schedule and Other Revisions to Part B for CY 2009; and Revisions to
                the Amendment of the E-Prescribing Exemption for Computer Generated
                Facsimile Transmissions; Proposed Rule (73 FR 38589) (hereinafter
                referred to the ``CY 2009 PFS proposed rule''), we requested
                recommendations from the RUC to aid in our review of Harvard-valued
                codes that had not yet been reviewed, focusing first on high-volume,
                low intensity codes. In the fourth Five-Year Review (76 FR 32410), we
                requested recommendations from the RUC to aid in our review of Harvard-
                valued codes with annual utilization of greater than 30,000 services.
                In the CY 2013 PFS final rule with comment period, we identified
                specific Harvard-valued services with annual allowed charges that total
                at least $10,000,000 as potentially misvalued. In addition to the
                Harvard-valued codes, in the CY 2013 PFS final rule with comment period
                we finalized for review a list of potentially misvalued codes that have
                stand-alone PE (codes with physician work and no listed work time and
                codes with no physician work that have listed work time).
                    In the Medicare Program; Revisions to Payment Policies under the
                Physician Fee Schedule and Other Revisions to Part B for CY 2016 final
                rule with comment period (80 FR 70886) (hereinafter referred to as the
                ``CY 2016 PFS final rule with comment period''), we finalized for
                review a list of potentially misvalued services, which included eight
                codes in the neurostimulators analysis-programming family (CPT codes
                95970-95982). We also finalized as potentially misvalued 103 codes
                identified through our screen of high expenditure services across
                specialties.
                    In the Medicare Program; Revisions to Payment Policies under the
                Physician Fee Schedule and Other Revisions to Part B for CY 2017;
                Medicare Advantage Bid Pricing Data Release; Medicare Advantage and
                Part D Medical Loss Ratio Data Release; Medicare Advantage Provider
                Network Requirements; Expansion of Medicare Diabetes Prevention Program
                Model; Medicare Shared Savings Program Requirements final rule (81 FR
                80170) (hereinafter referred to as the ``CY 2017 PFS final rule''), we
                finalized for review a list of potentially misvalued services, which
                included eight codes in the end-stage renal disease home dialysis
                family (CPT codes 90963-90970). We also finalized as potentially
                misvalued 19 codes identified through our screen for 0-day global
                services that are typically billed with an evaluation and management
                (E/M) service with modifier 25.
                    In the CY 2018 PFS final rule, we finalized arthrodesis of
                sacroiliac joint (CPT code 27279) as potentially misvalued. Through the
                use of comment solicitations with regard to specific codes, we also
                examined the valuations of other services, in addition to, new
                potentially misvalued code screens (82 FR 53017 through 53018).
                3. CY 2020 Identification and Review of Potentially Misvalued Services
                    In the CY 2012 PFS final rule with comment period (76 FR 73058), we
                finalized a process for the public to nominate potentially misvalued
                codes. In the CY 2015 PFS final rule with comment period (79 FR 67606
                through 67608), we modified this process whereby the public and
                stakeholders may nominate potentially misvalued codes for review by
                submitting the code with supporting documentation by February 10th of
                each year. Supporting documentation for codes nominated for the annual
                review of potentially misvalued codes may include the following:
                     Documentation in peer reviewed medical literature or other
                reliable data that demonstrate changes in physician work due to one or
                more of the following: Technique, knowledge and technology, patient
                population, site-of-service, length of hospital stay, and work time.
                     An anomalous relationship between the code being proposed
                for review and other codes.
                     Evidence that technology has changed physician work.
                     Analysis of other data on time and effort measures, such
                as operating room logs or national and other representative databases.
                     Evidence that incorrect assumptions were made in the
                previous valuation of the service, such as a
                [[Page 62625]]
                misleading vignette, survey, or flawed crosswalk assumptions in a
                previous evaluation.
                     Prices for certain high cost supplies or other direct PE
                inputs that are used to determine PE RVUs are inaccurate and do not
                reflect current information.
                     Analyses of work time, work RVU, or direct PE inputs using
                other data sources (for example, VA, NSQIP, the STS National Database,
                and the MIPS data).
                     National surveys of work time and intensity from
                professional and management societies and organizations, such as
                hospital associations.
                    We evaluate the supporting documentation submitted with the
                nominated codes and assess whether the nominated codes appear to be
                potentially misvalued codes appropriate for review under the annual
                process. In the following year's PFS proposed rule, we publish the list
                of nominated codes and indicate for each nominated code whether we
                agree with its inclusion as a potentially misvalued code. The public
                has the opportunity to comment on these and all other proposed
                potentially misvalued codes. In that year's final rule, we finalize our
                list of potentially misvalued codes.
                a. Public Nominations
                    We received three submissions that nominated codes for review under
                the potentially misvalued code initiative, prior to our February 10,
                2019 deadline. In addition to three public nominations, CMS also
                nominated one additional code for review.
                    One commenter requested that CMS consider CPT code 10005 (Fine
                needle aspiration biopsy, including ultrasound guidance; first lesion)
                and CPT code 10021 (Fine needle aspiration biopsy, without imaging
                guidance; first lesion) for nomination as potentially misvalued. We
                note that these two CPT codes were recently reviewed within a family of
                13 similar codes. Our review of these codes and our rationale for
                finalizing the current values are discussed extensively in the CY 2019
                PFS final rule (83 FR 59517). For CPT code 10021, the RUC recommended a
                32 percent reduction from its previous physician time and a 5 percent
                reduction in the work RVU. The commenter disagreed with this change and
                stated that there was a change in intensity of the procedure now as
                compared to what it was in 1995 when this code was last evaluated. The
                commenter also stated that there was a change in intensity of the work
                performed due to use of more complicated equipment, more stringent
                specimen sampling that allow for extensive examination of smaller and
                deeper lesions within the body. The commenter disagreed with the CMS'
                crosswalked CPT code 36440 (Push blood transfusion, patient 2 years or
                younger) and presented CPT codes 40490 (Biopsy of lip) and 95865
                (Needle measurement and recording of electrical activity of muscles of
                voice box) as more appropriate crosswalks.
                    Another commenter requested that CMS consider HCPCS code G0166
                (External counterpulsation, per treatment session) as potentially
                misvalued. This code was reviewed for the CY 2019 PFS final rule (83 FR
                59578), and the work RVU and direct PE inputs as recommended by the AMA
                RUC were finalized by CMS. We finalized the valuation of this code with
                no refinements. However, the commenter noted that the PE inputs that
                were considered for this code did not fully reflect the total resources
                required to deliver the service. We stated we would review the
                commenter's submission of additional new data and public comments
                received in combination with what was previously presented in the CY
                2019 PFS final rule.
                    CMS nominated CPT code 76377 (3D rendering with interpretation and
                reporting of computed tomography, magnetic resonance imaging,
                ultrasound, or other tomographic modality with image postprocessing
                under concurrent supervision; requiring image postprocessing on an
                independent workstation) as potentially misvalued. 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) was reviewed by the
                AMA RUC at the April 2018 RUC meeting. However, CPT code 76377, which
                is very similar to CPT code 76376, was not reviewed, and is likely now
                misvalued, in light of the similarities between the two codes. The
                specialty societies noted that the two codes are different because they
                are utilized by different patient populations (as evidenced by the ICD-
                10 diagnoses); however, we view both codes to be similar enough that
                CPT code 76377 should be reviewed to maintain relativity in the code
                family.
                    We have received and reviewed all public comments to all these
                codes that were nominated as potentially misvalued. Below, we present
                the summarizations of all these public comments.
                    Comment: One commenter provided information to CMS in which they
                stated that the work involved in furnishing services represented by the
                office/outpatient E/M code set (CPT codes 99201-99215) has changed
                sufficiently to warrant revaluation. Specifically, the commenter stated
                that these codes have not been reviewed in over 12 years and in that
                time have suffered passive devaluation as more and more procedures and
                other services have been added to the CPT code set, which are
                subsequently valued in a budget neutral manner, through notice and
                comment rulemaking, on the Medicare PFS. The commenter also stated that
                re-evaluation of these codes is critical to the success of CMS'
                objective of advancing value-based care through the introduction of
                Advanced Alternative Payment Models (APMs) as these APMs rely on the
                underlying E/M codes as the basis for payment or reference price for
                bundled payments.
                    Response: We acknowledge the points made by the commenter regarding
                the valuation of E/M codes for office and outpatient visits. We agreed,
                in principle, that the existing set of office/outpatient E/M CPT codes
                may not be correctly valued. In recent years, we have specifically
                considered how best to update and revalue the E/M codes, which
                represent a significant proportion of PFS expenditures, and have also
                engaged in ongoing dialogue with the practitioner community. In the CY
                2019 PFS proposed and final rules, in part due to these ongoing
                stakeholder discussions, we proposed and finalized changes to E/M
                payment and documentation requirements to implement policy objectives
                focused on reducing provider documentation burden (83 FR 59625).
                    As we stated in the proposed rule, concurrently, the CPT Editorial
                Panel, under similar policy objectives, convened a workgroup and
                proposed to refine the existing E/M office/outpatient code set. Shortly
                thereafter, the AMA RUC revalued these services and submitted
                recommendations to CMS for review. In the CY 2020 PFS proposed rule, we
                considered the RUC-recommended values for office/outpatient E/M codes
                in proposing new values for CY 2021. For more detail on our review and
                consideration of the revalued office/outpatient E/M services please
                refer to section II.P of this final rule.
                    Table 16 lists the HCPCS and CPT codes that we proposed as
                potentially misvalued.
                [[Page 62626]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.022
                    We received public comments on the HCPCS and CPT codes that we
                proposed as potentially misvalued. The following is a summary of the
                comments we received and our responses.
                    Comment: Several commenters submitted comments about HCPCS code
                G0166 and claimed that in the CY 2019 PFS final rule, CMS did not have
                the complete list of inputs for this ``Practice Expense only'' code,
                which resulted in an under-valuation of its payment.
                    Response: We note that the AMA RUC in its comment letter to the
                proposed rule informed CMS that it would review this service and
                forward any recommendations to CMS for review. We will review the AMA
                RUC's forthcoming recommendations and will consider any refinements to
                the valuation for this code through our standard rulemaking process for
                CY 2021.
                    Comment: Several commenters highlighted the payment reduction to
                code G0166 in CY 2019 relative to CY 2018 and requested that CMS revert
                back to the CY 2018 payment. Commenters also noted that the current and
                reduced payment may endanger continued offering of this service,
                particularly to beneficiaries with coronary artery disease with angina
                for whom surgical intervention may not be appropriate and where
                medications have proved to be ineffective.
                    Response: We acknowledge the receipt of all comments related to
                HCPCS code G0166 outlining that it may be inaccurately valued. We have
                reviewed the information included in the comments received, and look
                forward to reviewing the AMA RUC recommendations for this service. We
                will review the AMA RUC's forthcoming recommendations and will consider
                any refinements to the valuation for this code through our standard
                rulemaking process for CY 2021.
                    We refer readers to section II.B of this final rule for details on
                the limited updates to the supply and equipment pricing for HCPCS code
                G0166.
                    Comment: Several commenters responded to the inclusion of CPT codes
                10005 and 10021 on the potentially misvalued codes list, with the
                majority urging CMS to revise the CY 2019 finalized RVUs by adopting
                the higher RUC recommended RVUs.
                    Response: We appreciate commenters' perspective on the valuation of
                CPT codes 10005 and 10021 but refer the commenters to our CY 2019 PFS
                final rule for our review of the relevant inputs and RUC
                recommendations for these codes. We have reviewed the comments
                received, including any additional information in response to our
                discussion of these codes under the potentially misvalued code
                initiative. We believe our refinements to the valuations for these
                services continue to be valid, as no new compelling information has
                been presented.
                    Comment: Commenters disagreed with using the crosswalked CPT code
                36440 as the reference code for valuing CPT code 10021, even though the
                physician work times for both codes are very similar. One commenter
                stated that the previous values for work time (1995) were also based on
                a crosswalk (CPT codes 88170 and 88171) and not a survey, and
                therefore, the decrease in work time did not warrant a proportional
                change in work RVU as the previous times were inaccurate. Also, as
                discussed in the CY 2019 PFS final rule with comment period (83 FR
                59517), commenters stated that the work intensity for both codes are
                unequal as well their incongruous procedure descriptors, pointing out
                the fact that CPT codes 36440, 88170, and 88171 are clinically very
                different to CPT code 10021.
                    Response: As we have discussed in previous rules, we agree that it
                is important to use the most recent data available regarding time, and
                we note that when many years have passed between when time is measured,
                significant discrepancies can occur. However, we continue to believe
                that our operating assumption regarding the validity of the existing
                values as a point of comparison is critical to the integrity of the
                relative value system as currently constructed. The times currently
                associated with codes play a very important role in PFS ratesetting,
                both as points of comparison in establishing work RVUs and in the
                allocation of indirect PE RVUs by specialty. If we were to operate
                under the assumption that previously recommended work times had
                routinely been overestimated, this would undermine the relativity of
                the work RVUs on the PFS in general, given the process under which
                codes are often valued by comparisons to codes with similar times, and
                it also would undermine the validity of the allocation of indirect PE
                RVUs to physician specialties across the PFS. Instead, we believe that
                it is crucial that the code valuation process take place with the
                understanding that the existing work times used in the PFS ratesetting
                processes are accurate. We recognize that adjusting work RVUs for
                changes in time is not always a straightforward process and that the
                intensity associated with changes in time is not necessarily always
                linear, which is why we apply various methodologies to identify several
                potential work values for individual codes. We continue to disagree
                with commenters' distinction of different types of physician work times
                as being better or worse in their measure of validity in comparison to
                each other, and believe that CPT code 36440 is a good comparable code
                to CPT code 10021 in physician work and physician work times.
                    Comment: For CPT code 10021, one commenter disagreed with CMS
                maintaining the code's global indicator of ``XXX'' (global concept does
                not apply) and recommended a change to ``000'' (minor surgery/zero day
                global).
                    Response: We did change the multiple procedure indicator for CPT
                code 10021 from a ``0'' (payment rules do not apply) to a ``2''
                (standard payment adjustments do apply), but as we stated in CY 2019
                PFS final rule (83 FR 59520), we do not agree that it would have been
                more accurate to use codes with a 0-day global period as references for
                the codes in this family, and the multiple procedure policy continues
                to apply for CPT code 10021.
                    In concluding our review of all the comments submitted for the
                nominated potentially misvalued CPT codes of 10005 and 10021, we do not
                believe we have received any additional
                [[Page 62627]]
                information to consider in the context of our previous review of these
                services. Therefore, we are not including CPT codes 10005 and 10021 on
                our final list of potentially misvalued codes for CY 2020.
                    Comment: One commenter noted on the CMS nominated CPT code 76377
                (which we found to be very similar to CPT code 76376 that was AMA RUC
                reviewed for CY 2020), that although both code descriptors are similar,
                they have different clinical indications, different patients, different
                complexity in the work and require different resources and equipment,
                and that CPT code 76377 was not identified on any of the normal
                screens.
                    Response: CMS' nominated CPT code 76377 as potentially misvalued
                due to its similarity to 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 is reviewed and
                finalized for 2020. Due to the refinements made to CPT code 76376, CPT
                code 76377 should be similarly reviewed to resolve the two codes'
                likely discrepancies. We will consider the valuation of this code in
                future rulemaking. During this review, we will determine if the
                clinical indications, the complexity of the work, and the resources
                that are required, are similar or different for both of these codes.
                    Comment: We received several comments regarding the AMA RUC's
                survey and recommended values for the E/M office/outpatient evaluation
                and management codes (99201-99015) for CY 2021.
                    Response: We refer readers to section II. P. of this final rule
                where we discuss these codes in detail.
                    After consideration of the comments received, in summary, we are
                including CPT code 76377 and HCPCS code G0166 on our final list of
                potentially misvalued codes for CY 2020. However, we are not including
                CPT codes 10005 and 10021 on our final list of potentially misvalued
                codes for CY 2020.
                4. Insertion, Removal, and Removal and Insertion of Implantable
                Interstitial Glucose Sensor System (Category III CPT codes 0446T,
                0447T, and 0448T)
                    Category III CPT codes 0446T, 0447T, and 0448T describe the
                services related to the insertion, removal, and removal and insertion
                of an implantable interstitial glucose sensor from subcutaneous pocket,
                in a subcutaneous pocket via incision. The implantable interstitial
                glucose sensors are part of systems that can allow real-time glucose
                monitoring, provides glucose trend information, and signal alerts for
                detection and prediction of episodes of low blood glucose
                (hypoglycemia) and high blood glucose (hyperglycemia).
                    Diabetes is the sixth leading cause of death in the United States,
                and approximately 20 million Americans have diabetes with an estimated
                20.9 percent of the senior population age 60 and older being affected.
                Millions of people have diabetes and do not know it. Left undiagnosed,
                diabetes can lead to severe complications such as heart disease,
                stroke, blindness, kidney failure, leg and foot amputations, and death
                related to pneumonia and flu. Scientific evidence now shows that early
                detection and treatment of diabetes with diet, physical activity, and
                new medicines can prevent or delay much of the illness and
                complications associated with diabetes. As with management of other
                chronic conditions, we believe innovative technologies that provide
                improved data to physicians and patients can be important tools in
                promoting patient-centered care.
                    The codes that describe the implantation, removal, and removal and
                implantation of implantable interstitial glucose sensors are currently
                contractor-priced. Since the publication of the CY 2020 PFS proposed
                rule, we have become aware that the contractor pricing for these
                services has contributed to significant confusion in the community with
                regards to Medicare payment rules for these kinds of monitoring
                systems. We understand that this confusion has led to inhibited access
                to these services for Medicare beneficiaries.
                    Given the immediate needs of Medicare beneficiaries with diabetes,
                including some who could benefit from these innovative technologies, we
                are seeking information from stakeholders to ensure proper payment for
                this important physician's service by establishing national payment
                rates in future rulemaking.
                    We are seeking information from stakeholders on the resources
                involved in furnishing the services described by 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). We are specifically seeking
                recommendations, including the work RVUs, work time, and direct PE
                inputs, associated with the resources involved in inserting and
                removing the device, as well as the resource costs of the implantable
                device and disposable supplies (that is, the supply costs of the
                implantable device ``implantable interstitial glucose sensor'', and the
                smart transmitter).
                    Under our existing policies, we welcome recommendations on
                appropriate valuation for these services and any recommendations
                submitted by February 10, 2020 would be considered for CY 2021 PFS
                rulemaking.
                F. Payment for Medicare Telehealth Services Under Section 1834(m) of
                the Act
                    As discussed in this rule and in prior rulemaking, several
                conditions must be met for Medicare to make payment for telehealth
                services under the PFS. For further details, see the full discussion of
                the scope of Medicare telehealth services in the CY 2018 PFS final rule
                (82 FR 53006) and in 42 CFR 410.78 and 414.65.
                1. Adding Services to the List of Medicare Telehealth Services
                    In the CY 2003 PFS final rule with comment period (67 FR 79988), we
                established a process for adding services to or deleting services from
                the list of Medicare telehealth services in accordance with section
                1834(m)(4)(F)(ii) of the Act. This process provides the public with an
                ongoing opportunity to submit requests for adding services, which are
                then reviewed by us. Under this process, we assign any submitted
                request to add to the list of telehealth services to one of the
                following two categories:
                     Category 1: Services that are similar to professional
                consultations, office visits, and office psychiatry services that are
                currently on the list of telehealth services. In reviewing these
                requests, we look for similarities between the requested and existing
                telehealth services for the roles of, and interactions among, the
                beneficiary, the physician (or other practitioner) at the distant site
                and, if necessary, the telepresenter, a practitioner who is present
                with the beneficiary in the originating site. We also look for
                similarities in the telecommunications system used to deliver the
                service; for example, the use of interactive audio and video equipment.
                     Category 2: Services that are not similar to those on the
                current list of
                [[Page 62628]]
                telehealth services. Our review of these requests includes an
                assessment of whether the service is accurately described by the
                corresponding code when furnished via telehealth and whether the use of
                a telecommunications system to furnish the service produces
                demonstrated clinical benefit to the patient. Submitted evidence should
                include both a description of relevant clinical studies that
                demonstrate the service furnished by telehealth to a Medicare
                beneficiary improves the diagnosis or treatment of an illness or injury
                or improves the functioning of a malformed body part, including dates
                and findings, and a list and copies of published peer reviewed articles
                relevant to the service when furnished via telehealth. Our evidentiary
                standard of clinical benefit does not include minor or incidental
                benefits.
                    Some examples of clinical benefit include the following:
                     Ability to diagnose a medical condition in a patient
                population without access to clinically appropriate in-person
                diagnostic services.
                     Treatment option for a patient population without access
                to clinically appropriate in-person treatment options.
                     Reduced rate of complications.
                     Decreased rate of subsequent diagnostic or therapeutic
                interventions (for example, due to reduced rate of recurrence of the
                disease process).
                     Decreased number of future hospitalizations or physician
                visits.
                     More rapid beneficial resolution of the disease process
                treatment.
                     Decreased pain, bleeding, or other quantifiable symptom.
                     Reduced recovery time.
                    The list of telehealth services, including the additions described
                later in this section, can be located on the CMS website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
                    Historically, requests to add services to the list of Medicare
                telehealth services had to be submitted and received no later than
                December 31 of each calendar year to be considered for the next
                rulemaking cycle. However, 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. For example, to be considered during PFS
                rulemaking for CY 2021, requests to add services to the list of
                Medicare telehealth services must be submitted and received by February
                10, 2020. Each request to add a service to the list of Medicare
                telehealth services must include any supporting documentation the
                requester wishes us to consider as we review the request. Because we
                use the annual PFS rulemaking process as the vehicle to make changes to
                the list of Medicare telehealth services, requesters should be 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 to add services to the list of Medicare telehealth services,
                including where to mail these requests, see our website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
                2. Requests To Add Services to the List of Telehealth Services for CY
                2020
                    Under our current policy, we add services to the telehealth list on
                a Category 1 basis when we determine that they are similar to services
                on the existing telehealth list for the roles of, and interactions
                among, the beneficiary, physician (or other practitioner) at the
                distant site and, if necessary, the telepresenter. As we stated in the
                CY 2012 PFS final rule with comment period (76 FR 73098), we believe
                that the Category 1 criteria not only streamline our review process for
                publicly requested services that fall into this category, but also
                expedite our ability to identify codes for the telehealth list that
                resemble those services already on this list.
                    We did not receive any requests from the public for additions to
                the Medicare Telehealth list for CY 2020. We believe that the vast
                majority of services under the PFS that can be appropriately furnished
                as Medicare telehealth services have already been added to the list.
                    However, we proposed adding three new HCPCS G codes describing new
                bundled services for treatment of opioid use disorders in section II.H.
                of the CY 2020 PFS proposed rule which we noted are sufficiently
                similar to services currently on the telehealth list to be added on a
                Category 1 basis. Therefore, we proposed to add the face-to-face
                portions of the following services to the telehealth list on a Category
                1 basis for CY 2020:
                     HCPCS code G2086: Office-based treatment for opioid use
                disorder, including development of the treatment plan, care
                coordination, individual therapy and group therapy and counseling; at
                least 70 minutes in the first calendar month.
                     HCPCS code G2087: Office-based treatment for opioid use
                disorder, including care coordination, individual therapy and group
                therapy and counseling; at least 60 minutes in a subsequent calendar
                month.
                     HCPCS code G2088: Office-based treatment for opioid use
                disorder, including care coordination, individual therapy and group
                therapy and counseling; each additional 30 minutes beyond the first 120
                minutes (List separately in addition to code for primary procedure).
                    We note that in the CY 2020 PFS proposed rule (84 FR 40518), we
                referred to these services using placeholder codes, HCPCS codes GYYY1,
                GYYY2, and GYYY3, which are being replaced with the final G codes
                above. Similar to our addition of the required face-to-face visit
                component of TCM services to the Medicare Telehealth list in the CY
                2014 PFS final rule with comment period (78 FR 74403), since HCPCS
                codes G2086, G2087, and G2088 include face-to-face psychotherapy
                services, we believe that the face-to-face portions of these services
                are sufficiently similar to services currently on the list of Medicare
                telehealth services for these services to be added under Category 1.
                Specifically, we believe that the psychotherapy portions of the bundled
                codes are similar to the psychotherapy codes described by CPT codes
                90832 and 90853, which are currently on the Medicare telehealth list.
                We note that like certain other non-face-to-face PFS services, the
                other components of HCPCS codes G2086-G2088 describing care
                coordination are commonly furnished remotely using telecommunications
                technology, and do not require the patient to be present in-person with
                the practitioner when they are furnished. As such, we do not need to
                consider whether the non-face-to-face aspects of HCPCS codes G2086-
                G2088 are similar to other telehealth services. Were these components
                of HCPCS codes G2086-G2088 separately billable, they would not need to
                be on the Medicare telehealth list to be covered and paid in the same
                way as services delivered without the use of telecommunications
                technology. We also note that by considering the face-to-face portion
                of these services to be eligible for telehealth services, the
                originating site facility fee could be reported, consistent with all
                other rules, when these services are furnished via telehealth.
                    As discussed in the CY 2019 PFS final rule (83 FR 59496), we note
                that 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 removes the geographic limitations for telehealth services
                furnished on or after July 1, 2019, for individuals diagnosed with a
                [[Page 62629]]
                substance use disorder (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. Section 2001(a) of the SUPPORT Act
                additionally amended section 1834(m) of the Act to require that no
                originating site facility fee will be paid in instances when the
                individual's home is the originating site. We believe that adding HCPCS
                codes G2086, G2087, and G2088 to the Medicare telehealth list will
                complement the existing policies related to flexibilities in treating
                SUDs.
                    We note that we welcome public nominations for additions to the
                Medicare telehealth list. More information on the nomination process is
                posted under the Telehealth section of the CMS website, which can be
                accessed at the following web address https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
                    We received public comments on the proposed HCPCS codes for
                addition to the telehealth list on a Category 1 basis. The following is
                a summary of the comments we received and our responses.
                    Comment: The majority of commenters supported our proposal to add
                HCPCS codes G2086, G2087, and G2088 to the Medicare telehealth list,
                although a few disagreed, stating that these services should only be
                furnished in person.
                    Response: We thank the commenters for their support and feedback.
                We note that the psychotherapy services that are included in this
                bundled payment are already on the list of Medicare telehealth
                services. After consideration of the comments received, we are
                finalizing our proposal to add HCPCS codes G2086, G2087, and G2088 to
                the Medicare telehealth list beginning in CY 2020.
                    Comment: Several commenters disagreed with CMS' statement that most
                eligible services had been added to the Medicare telehealth list and
                suggested that CMS should continue to engage with stakeholders to
                identify other services that could be furnished via Medicare telehealth
                or communication technology-based services. A few commenters also
                provided recommendations for additional services that could be added to
                the Medicare telehealth list, as well as suggestions for how CMS could
                improve the process of requesting that services be added. Commenters
                reiterated as they have for many years that the statutory restrictions
                under section 1834(m) of the Act limit availability of telehealth
                services, and many encouraged CMS to utilize its demonstration
                authority to waive restrictions.
                    Response: We will continue to engage with stakeholders to identify
                services to add to the Medicare telehealth list and other ways to
                leverage technology in furnishing services under the PFS within the
                scope of the statute. We note that the deadline for submitting requests
                for additions to the Medicare Telehealth list is February 10 of the
                year prior to the year in which the codes could be added to the
                Medicare telehealth list, and any requests that are received after that
                time will be considered in the following year's rulemaking.
                    Comment: A few commenters requested that CMS allow visits with the
                prescribing physician for medications that require medical visits for
                monitoring (for example, buprenorphine) to also be furnished via
                telehealth.
                    Response: We note that the majority of the E/M visit codes are
                already on the Medicare telehealth list and can be furnished in
                addition to HCPCS codes G2086, G2087, and G2088. Specific requests for
                consideration of additional codes for the Medicare telehealth list
                should be submitted through the process outlined above. We also note
                that there are existing rules related to telemedicine and prescribing
                buprenorphine for the treatment of OUD (https://www.hhs.gov/opioids/sites/default/files/2018-09/hhs-telemedicine-hhs-statement-final-508compliant.pdf).
                3. Telehealth Originating Site Facility Fee Payment Amount Update
                    Section 1834(m)(2)(B) of the Act established the Medicare
                telehealth originating site facility fee for telehealth services
                furnished from October 1, 2001 through December 31, 2002, at $20.00.
                For telehealth services furnished on or after January 1 of each
                subsequent calendar year, the telehealth originating site facility fee
                is increased by the percentage increase in the Medicare Economic Index
                (MEI) as defined in section 1842(i)(3) of the Act. The originating site
                facility fee for telehealth services furnished in CY 2019 is $26.15.
                The MEI increase for 2020 is 1.9 percent and is based on the most
                recent historical update of the MEI through 2019Q2 (2.4 percent), and
                the most recent historical multifactor productivity adjustment (MFP)
                through calendar year 2018 (0.5 percent). Therefore, for CY 2020, the
                payment amount for HCPCS code Q3014 (Telehealth originating site
                facility fee) is 80 percent of the lesser of the actual charge or
                $26.65. The Medicare telehealth originating site facility fee and the
                MEI increase by the applicable time period is shown in Table 17.
                [[Page 62630]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.023
                G. Medicare Coverage for Opioid Use Disorder Treatment Services
                Furnished by Opioid Treatment Programs (OTPs)
                1. Overview
                    Opioid use disorder (OUD) and deaths from prescription and illegal
                opioid overdoses have reached alarming levels. The Centers for Disease
                Control and Prevention (CDC) estimated 47,000 overdose deaths were from
                opioids in 2017 and 36 percent of those deaths were from prescription
                opioids.\1\ OUD has become a public health crisis. On October 26, 2017,
                Acting Health and Human Services Secretary, Eric D. Hargan declared a
                nationwide public health emergency on the opioid crisis as requested by
                President Donald Trump.\2\ This public health emergency was renewed by
                Secretary Alex M. Azar II on January 24, 2018, April 24, 2018, July 23,
                2018, and October 21, 2018, January 17, 2019, April 19, 2019, July 17,
                2019, and most recently, October 16, 2019.\3\
                ---------------------------------------------------------------------------
                    \1\ https://www.cdc.gov/drugoverdose/data/index.html.
                    \2\ https://www.hhs.gov/about/news/2017/10/26/hhs-acting-secretary-declares-public-health-emergency-address-national-opioid-crisis.html.
                    \3\ https://www.phe.gov/emergency/news/healthactions/phe/Pages/opioid-16oct2019.aspx.
                ---------------------------------------------------------------------------
                    The Medicare population, including individuals who are eligible for
                both Medicare and Medicaid, has the fastest growing prevalence of OUD
                compared to the general adult population, with more than 300,000
                beneficiaries diagnosed with OUD in 2014.\4\ An effective treatment for
                OUD is known as medication-assisted treatment (MAT). The Substance
                Abuse and Mental Health Services Administration (SAMHSA) defines MAT as
                the use of medication in combination with behavioral health services to
                provide an individualized approach to the treatment of substance use
                disorder (SUD), including OUD (Sec.  8.2). Currently, Medicare covers
                medications for MAT, including buprenorphine, buprenorphine-naloxone
                combination products, and extended-release injectable naltrexone under
                Part B or Part D, but does not cover methadone. Medicare also covers
                counseling and behavioral therapy services that are reasonable and
                necessary and furnished by practitioners that can bill and receive
                payment under Medicare.
                ---------------------------------------------------------------------------
                    \4\ https://jamanetwork.com/journals/jamapsychiatry/fullarticle/2535238.
                ---------------------------------------------------------------------------
                    Historically, Medicare has not covered methadone for MAT because of
                the unique manner in which this drug is dispensed and administered.
                Medicare Part B covers physician-administered drugs, drugs used in
                conjunction with durable medical equipment, and certain other
                statutorily-specified drugs. Medicare Part D covers drugs that are
                dispensed upon a prescription by a pharmacy. Methadone for MAT is not a
                drug administered by a physician under the ``incident to'' benefit like
                other MAT drugs (that is, implanted buprenorphine or injectable
                extended-release naltrexone) and therefore has not previously been
                covered by Medicare Part B. Methadone for MAT is also not a drug
                dispensed by a pharmacy like certain other MAT drugs (that is
                buprenorphine or buprenorphine-naloxone combination products) and
                therefore is not covered under Medicare Part D. Methadone for MAT is a
                schedule II controlled substance that is highly regulated because it
                has a high potential for abuse which may lead to severe psychological
                or physical dependence. As a result, methadone for MAT can only be
                dispensed and administered by an opioid treatment program (OTP) as
                provided under section 303(g)(1) of the Controlled Substances Act (21
                U.S.C. 823(g)(1)) and 42 CFR part 8. Additionally, OTPs, which are
                healthcare entities that focus on providing MAT for people diagnosed
                with OUD, were not previously entities that could bill and receive
                payment from Medicare for the services they furnish. Therefore, there
                has historically been a gap in Medicare coverage of MAT for OUD since
                methadone (one of the three Food and Drug Administration (FDA)-approved
                drugs for MAT) has not been covered.
                    Section 2005 of the Substance Use-Disorder Prevention that Promotes
                Opioid Recovery and Treatment for Patients and Communities Act (the
                SUPPORT Act) (Pub. L. 115-271, enacted October 24, 2018) added a new
                [[Page 62631]]
                section 1861(jjj) to the Act, establishing a new Part B benefit
                category for OUD treatment services furnished by an OTP beginning on or
                after January 1, 2020. Section 1861(jjj)(1) of the Act defines OUD
                treatment services as items and services furnished by an OTP (as
                defined in section 1861(jjj)(2) of the Act) for treatment of OUD.
                Section 2005 of the SUPPORT Act also amended the definition of
                ``medical and other health services'' in section 1861(s) of the Act to
                provide for coverage of OUD treatment services and added a new section
                1834(w) to the Act and amended section 1833(a)(1) of the Act to
                establish a bundled payment to OTPs for OUD treatment services
                furnished during an episode of care beginning on or after January 1,
                2020.
                    OTPs must have a current, valid certification from SAMHSA to
                satisfy the Controlled Substances Act registration requirement under 21
                U.S.C. 823(g)(1). To obtain SAMHSA certification, OTPs must have a
                valid accreditation by an accrediting body approved by SAMHSA, and must
                be certified by SAMHSA as meeting federal opioid treatment standards in
                Sec.  8.12. There are currently about 1,700 OTPs nationwide.\5\ All
                states except Wyoming have OTPs. Approximately 74 percent of patients
                receiving services from OTPs receive methadone for MAT, with the vast
                majority of the remaining patients receiving buprenorphine.\6\
                ---------------------------------------------------------------------------
                    \5\ https://dpt2.samhsa.gov/treatment/directory.aspx.
                    \6\ https://wwwdasis.samhsa.gov/dasis2/nssats.htm.
                ---------------------------------------------------------------------------
                    Many payers currently cover MAT services for treatment of OUD.
                Medicaid \7\ is one of the largest payers of medications for SUD,
                including methadone for MAT provided in OTPs.\8\ OUD treatment services
                and MAT are also covered by other payers such as TRICARE and private
                insurers. TRICARE established coverage and payment for MAT and OUD
                treatment services furnished by OTPs in late 2016 (81 FR 61068). In
                addition, as discussed in the ``Patient Protection and Affordable Care
                Act; HHS Notice of Benefit and Payment Parameters for 2020'' final
                rule, many qualified health plans covered MAT medications for plan year
                2018 (84 FR 17536).
                ---------------------------------------------------------------------------
                    \7\ Medicaid provides health care coverage to 65.9 million
                Americans, including low-income adults, children, pregnant women,
                elderly adults and people with disabilities. Medicaid is
                administered by states, according to federal requirements, and is
                funded jointly by states and the federal government. States have the
                flexibility to administer the Medicaid program to meet their own
                state needs within the Medicaid program parameters set forth in
                federal statute and regulations. As a result, there is variation in
                how each state implements its programs.
                    \8\ https://store.samhsa.gov/system/files/medicaidfinancingmatreport.pdf.
                ---------------------------------------------------------------------------
                    In the CY 2019 PFS final rule (83 FR 59497), we included a Request
                for Information (RFI) to solicit public comments on the implementation
                of the new Medicare benefit category for OUD treatment services
                furnished by OTPs established by section 2005 of the SUPPORT Act. We
                received 9 public comments. Commenters were generally supportive of the
                new benefit and expanding access to OUD treatment for Medicare
                beneficiaries. We received feedback that the bundled payments to OTPs
                should recognize the intensity of services furnished in the initiation
                stages, durations of care, the needs of patients with more complex
                needs, costs of emerging technologies, and use of peer support groups.
                We also received feedback that costs associated with care coordination
                among the beneficiary's practitioners should be included in the bundled
                payment given the myriad of health issues beneficiaries with OUD face.
                We considered this feedback as we developed our proposals for
                implementing the new benefit category for OUD treatment services
                furnished by OTPs and the proposed bundled payments for these services.
                    To implement section 2005 of the SUPPORT Act, we proposed to
                establish rules to govern Medicare coverage of and payment for OUD
                treatment services furnished in OTPs. We proposed to establish
                definitions of OUD treatment services and OTP for purposes of the
                Medicare Program. We also proposed a methodology for determining
                Medicare payment for such services provided by OTPs. We proposed to
                codify these policies in a new section of the regulations at Sec.
                410.67. For a discussion about Medicare enrollment requirements and the
                program integrity approach for OTPs, we refer readers to section III.H.
                in this final rule, Medicare Enrollment of Opioid Treatment Programs.
                2. Definitions
                a. Opioid Use Disorder Treatment Services
                    The SUPPORT Act amended section 1861 of the Act by adding a new
                subsection (jjj)(1) that defines ``opioid use disorder treatment
                services'' as the items and services that are furnished by an OTP for
                the treatment of OUD, as set forth in subparagraphs (A) through (F) of
                section 1861(jjj)(1) of the Act which include:
                     Opioid agonist and antagonist treatment medications
                (including oral, injected, or implanted versions) that are approved by
                the Food and Drug Administration (FDA) under section 505 of the Federal
                Food, Drug, and Cosmetic Act (FFDCA) (21 U.S.C. 355) for use in the
                treatment of OUD;
                     Dispensing and administration of such medications, if
                applicable;
                     Substance use counseling by a professional to the extent
                authorized under state law to furnish such services;
                     Individual and group therapy with a physician or
                psychologist (or other mental health professional to the extent
                authorized under state law);
                     Toxicology testing; and
                     Other items and services that the Secretary determines are
                appropriate (but in no event to include meals or transportation).
                    As described previously, section 1861(jjj)(1)(A) of the Act defines
                covered OUD treatment services to include oral, injected, and implanted
                opioid agonist and antagonist medications approved by the FDA under
                section 505 of the FFDCA for use in the treatment of OUD. There are
                three drugs currently approved by the FDA for the treatment of opioid
                dependence: Buprenorphine, methadone, and naltrexone.\9\ FDA notes that
                all three of these medications have been demonstrated to be safe and
                effective in combination with counseling and psychosocial support and
                that those seeking treatment for an OUD should be offered access to all
                three options as this allows providers to work with patients to select
                the medication best suited to an individual's needs.\10\ Each of these
                medications is discussed below in more detail.
                ---------------------------------------------------------------------------
                    \9\ https://www.fda.gov/drugs/drugsafety/informationbydrugclass/ucm600092.htm.
                    \10\ https://www.fda.gov/drugs/drugsafety/informationbydrugclass/ucm600092.htm.
                ---------------------------------------------------------------------------
                    Buprenorphine is FDA-approved for acute and chronic pain in
                addition to opioid dependence. It is listed by the Drug Enforcement
                Administration (DEA) as a Schedule III controlled substance because of
                its moderate to low potential for physical and psychological
                dependence.11 12 The medication's partial agonist properties
                allow for its use in opioid replacement therapy, which is a process of
                treating OUD by using a substance, for example, buprenorphine or
                methadone, to substitute for a stronger full agonist opioid.\13\
                Buprenorphine drug products that are currently FDA-approved and
                marketed for the treatment of opioid dependence include oral
                buprenorphine tablets, oral buprenorphine with
                [[Page 62632]]
                naloxone \14\ films and tablets, an extended-release buprenorphine
                injection for subcutaneous use, and a buprenorphine implant for
                subdermal administration.\15\ In most patients with opioid dependence,
                the initial oral dose is 2 to 4 mg per day with a maintenance dose of
                8-12 mg per day.\16\ Dosing for the extended-release injection is 300
                mg monthly for the first 2 months followed by a maintenance dose of 100
                mg monthly.\17\ The extended-release injection is indicated for
                patients who have initiated treatment with an oral buprenorphine
                product for a minimum of 7 days.\18\ The buprenorphine implant consists
                of four rods containing 74.2 mg of buprenorphine each, and provides up
                to 6 months of treatment for patients who are clinically stable on low-
                to-moderate doses of an oral buprenorphine-containing product.\19\
                Currently, federal regulations permit buprenorphine to be prescribed or
                dispensed by qualifying physicians and qualifying other practitioners
                at office-based practices and dispensed in OTPs.20 21
                ---------------------------------------------------------------------------
                    \11\ https://www.deadiversion.usdoj.gov/schedules/orangebook/c_cs_alpha.pdf.
                    \12\ https://www.dea.gov/drug-scheduling.
                    \13\ https://www.ncbi.nlm.nih.gov/books/NBK459126/.
                    \14\ Naloxone is added to buprenorphine to reduce its abuse
                potential and limit diversion.
                    \15\ https://www.fda.gov/drugs/drugsafety/informationbydrugclass/ucm600092.htm.
                    \16\ https://www.ncbi.nlm.nih.gov/books/NBK459126/.
                    \17\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/209819s001lbl.pdf.
                    \18\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/209819s001lbl.pdf.
                    \19\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/204442s006lbl.pdf.
                    \20\ https://www.fda.gov/Drugs/NewsEvents/ucm611659.htm.
                    \21\ 21 U.S.C. 823(g)(2).
                ---------------------------------------------------------------------------
                    Methadone is FDA-approved for management of severe pain in addition
                to opioid dependence. It is listed by the DEA as a Schedule II
                controlled substance because of its high potential for abuse, with use
                potentially leading to severe psychological or physical
                dependence.22 23 Methadone drug products that are FDA-
                approved for the treatment of opioid dependence include oral methadone
                concentrate and tablets.\24\ In patients with opioid dependence, the
                total daily dose of methadone on the first day of treatment should not
                ordinarily exceed 40 mg, unless the program physician documents in the
                patient's record that 40 mg did not suppress opioid abstinence, with
                clinical stability generally achieved at doses between 80 to 120 mg/
                day.\25\ By law, methadone used for treatment of OUD can only be
                dispensed through an OTP certified by SAMHSA except in certain, very
                limited circumstances.\26\
                ---------------------------------------------------------------------------
                    \22\ https://www.deadiversion.usdoj.gov/schedules/orangebook/c_cs_alpha.pdf.
                    \23\ https://www.dea.gov/drug-scheduling.
                    \24\ https://www.fda.gov/drugs/drugsafety/informationbydrugclass/ucm600092.htm.
                    \25\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/017116s032lbl.pdf.
                    \26\ https://www.samhsa.gov/medication-assisted-treatment/treatment/methadone.
                ---------------------------------------------------------------------------
                    Naltrexone is FDA-approved to treat alcohol dependence in addition
                to OUD.\27\ Unlike buprenorphine and methadone, which activate opioid
                receptors, naltrexone binds and blocks opioid receptors and reduces
                opioid cravings.\28\ Therefore, naltrexone is not a scheduled
                substance; there is no abuse and diversion potential with
                naltrexone.29 30 The naltrexone drug product that is FDA-
                approved for the treatment of opioid dependence is an extended-release,
                intramuscular injection.\31\ The recommended dose is 380 mg delivered
                intramuscularly every 4 weeks or once a month after the patient has
                achieved an opioid-free duration of a minimum of 7-10 days.\32\
                Naltrexone can be prescribed by any health care provider who is
                licensed to prescribe medications.\33\
                ---------------------------------------------------------------------------
                    \27\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/021897s042lbl.pdf.
                    \28\ https://www.samhsa.gov/medication-assisted-treatment/treatment/naltrexone.
                    \29\ https://www.deadiversion.usdoj.gov/schedules/orangebook/c_cs_alpha.pdf.
                    \30\ https://www.samhsa.gov/medication-assisted-treatment/treatment/naltrexone.
                    \31\ https://www.fda.gov/drugs/drugsafety/informationbydrugclass/ucm600092.htm.
                    \32\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/021897s042lbl.pdf.
                    \33\ https://www.samhsa.gov/medication-assisted-treatment/treatment/naltrexone.
                ---------------------------------------------------------------------------
                    We proposed that the OUD treatment services that may be furnished
                by OTPs include the first five items and services listed in the
                statutory definition described above, specifically the medications
                approved by the FDA under section 505 of the FFDCA for use in the
                treatment of OUD; the dispensing and administration of such medication,
                if applicable; substance use counseling; individual and group therapy;
                and toxicology testing. We also proposed to use our discretion under
                section 1861(jjj)(1)(F) of the Act to include other items and services
                that the Secretary determines are appropriate to include the use of
                telecommunications for certain services, as discussed later in this
                section. We proposed to codify this definition of OUD treatment
                services furnished by OTPs at Sec.  410.67(b). As part of this
                definition, we also proposed to specify that an OUD treatment service
                is an item or service that is furnished by an OTP that meets the
                applicable requirements to participate in the Medicare Program and
                receive payment.
                    We solicited comment on any other items and services (not including
                meals or transportation as they are statutorily prohibited) currently
                covered and paid for under Medicare Part B when furnished by Medicare-
                enrolled providers/suppliers that the Secretary should consider adding
                to this definition, including any evidence supporting the impact of the
                use of such items and services in the treatment of OUD and enumeration
                of their costs. We noted we were particularly interested in public
                feedback on whether intake activities, which may include services such
                as an initial physical examination, initial assessments and preparation
                of a treatment plan, as well as periodic assessments, should be
                included in the definition of OUD treatment services. Additionally, we
                noted that while the current FDA-approved medications under section 505
                of the FFDCA for the treatment of OUD are opioid agonists and
                antagonist medications, other medications that are not opioid agonist
                and antagonist medications, including drugs and biologicals, could be
                developed for the treatment of OUD in the future. We solicited public
                feedback on whether there are any drug development efforts in the
                pipeline that could result in medications intended for use in the
                treatment of OUD with a novel mechanism of action that does not involve
                opioid agonist and antagonist mechanisms (that is, outside of
                activating and/or blocking opioid receptors). We also solicited comment
                on how medications that may be approved by the FDA in the future for
                use in the treatment of OUD with a novel mechanism of action, such as
                medications approved under section 505 of the FFDCA to treat OUD and
                biological products licensed under section 351 of the Public Health
                Service Act to treat OUD, should be considered in the context of OUD
                treatment services provided by OTPs, and whether CMS should use the
                discretion afforded under section 1861(jjj)(1)(F) of the Act to include
                such medications in the definition of OUD treatment services given the
                possibility that such medications could be approved in the future.
                    We received a number of public comments on the proposed definition
                of ``opioid use disorder treatment services.'' The following is a
                summary of the comments we received and our responses.
                    Comment: Commenters were generally supportive of including the five
                statutorily-required items and services in the definition of OUD
                treatment services: (1) Opioid agonist and antagonist treatment
                medications approved by the FDA for treatment of OUD; (2) dispensing
                and administration
                [[Page 62633]]
                of such medications; (3) substance use counseling; (4) individual and
                group therapy; and (5) toxicology testing. Commenters were also
                generally supportive of the use of telecommunications for substance use
                counseling and individual and group therapy services.
                    Response: We thank commenters for their support of including the
                five statutorily-required items and services and the use of
                telecommunications for certain services in the definition of OUD
                treatment services. We are finalizing a definition of OUD treatment
                services that includes these items and services at Sec.  410.67(b).
                    Comment: Many commenters expressed support for allowing licensed
                mental health professionals to directly bill Medicare for counseling
                and therapy services provided in an OTP. Some commenters requested
                clarification on whether OUD treatment services would only include
                substance use counseling and individual and group therapy services
                furnished by physicians, psychologists, and practitioners that can bill
                Medicare directly and not services furnished by other types of mental
                health professionals that are licensed by the state, such as licensed
                professional counselors, licensed mental health counselors, and
                licensed clinical professional counselors. These commenters raised
                concerns that only allowing physicians and psychologists to furnish
                these services and not including other mental health professionals
                authorized by the state to furnish counseling and therapy services
                would limit access to care due to workforce shortages. Some commenters
                requested that we clarify the distinction between substance use
                counseling and individual and group therapy services or allow these
                terms to be generally used interchangeably.
                    Response: Under sections 1861(jjj)(1)(C) and (D) of the Act,
                substance use counseling for OUD treatment can be provided by ``a
                professional to the extent authorized under State law to furnish such
                services,'' while individual and group therapy can be ``with a
                physician or psychologist (or other mental health professional to the
                extent authorized under State law).'' Consistent with the statute, in
                the proposed rule we did not propose to limit the professionals that
                can provide these services to physicians, psychologists, or other
                practitioners who can bill Medicare directly. Instead, we noted that
                the professionals that could provide such services could include
                licensed professional counselors, licensed clinical alcohol and drug
                counselors, and certified peer specialists that are permitted to
                furnish this type of therapy or counseling by state law and scope of
                practice. To the extent that the individuals furnishing therapy or
                counseling services are not authorized under state law to furnish such
                services, the therapy or counseling services provided by these
                professionals would not be covered as OUD treatment services. Regarding
                the commenters' request for clarification of the distinction between
                substance use counseling and therapy services, we are not specifying
                the differences between these two types of services, but would note
                that different types of professionals may be authorized to furnish
                substance use counseling versus therapy services under state law.
                Regarding the comments that supported allowing licensed mental health
                professionals to directly bill Medicare for counseling and therapy
                services provided in an OTP, we note that only OTPs can bill for the
                bundled payment for furnishing OUD treatment services.
                    Comment: Several commenters opined on the types of toxicology
                testing that should be included in the definition of OUD treatment
                services. One commenter recommended that we clarify the language
                regarding ``toxicology testing'' in the definition of OUD treatment
                services to include ``presumptive and definitive drug testing in line
                with clinical best practice'' to better de-stigmatize the use of these
                services. Other commenters suggested that only presumptive toxicology
                testing be included in the definition and that definitive testing be
                billed separately under the Medicare Clinical Laboratory Fee Schedule
                (CLFS). Alternatively, if definitive testing were to be included,
                commenters suggested that the bundled payment rate should be updated to
                reflect the cost of this type of toxicology testing by increasing the
                bundled payment rate or establishing add-on payments for definitive
                testing. Commenters raised the differences in complexities and costs
                between presumptive and definitive toxicology testing. These commenters
                explained that presumptive testing is an initial test that is conducted
                through point of care rapid result cup testing, which has testing and
                accuracy limitations. OTPs typically perform presumptive toxicology
                testing for drugs of abuse on-site using cups and dipsticks that
                indicate the presence or absence of drug classes as long as the test
                systems that are used are classified as waived test systems under the
                regulations implementing the Clinical Laboratory Improvement Amendments
                (CLIA) (Pub. L. 100-578, enacted October 31, 1988), as amended, 42 CFR
                part 493, and the OTP has a valid certificate of waiver that authorizes
                it to perform CLIA waived tests.
                    Due to limitations of presumptive testing, OTPs may also send urine
                samples to reference labs for definitive drug testing to make sure they
                know exactly which drugs have been ingested. Definitive drug testing
                uses liquid or gas chromatography coupled with mass spectrometry to
                identify hundreds of specific drugs and their metabolites. Definitive
                drug testing identifies and precisely quantifies specific drugs and/or
                metabolites that are positive in a sample. A treating physician may
                order a confirmatory test despite the outcome of the presumptive
                testing to obtain more information on the drugs that a patient is
                taking. Commenters raised the cost differences under the CY 2019
                Medicare CLFS between the two types of tests ranging from $12.60-$64.65
                for presumptive testing to $114.43-$246.92 for definitive testing. Some
                commenters requested clarification of the distinction between the
                toxicology testing that would be included in the definition of OUD
                treatment services and would be paid under the bundle and medically-
                necessary toxicology testing that is billed and paid under the Medicare
                CLFS.
                    Response: We noted in the CY 2020 PFS proposed rule that under
                SAMHSA certification standards at Sec.  8.12(f)(6), OTPs are required
                to provide adequate testing or analysis for drugs of abuse, including
                at least eight random drug abuse tests per year, per patient in
                maintenance treatment in accordance with generally accepted clinical
                practice. These drug abuse tests are used for diagnosing, monitoring
                and evaluating progress in treatment (84 FR 40527). Consistent with the
                discussion of the different types of toxicology testing in the proposed
                rule, we are clarifying that the reference to toxicology testing in the
                definition of OUD treatment services includes both presumptive and
                definitive testing. We are also clarifying that all types of toxicology
                testing that are used for diagnosing, monitoring and evaluating the
                progress in treatment at the OTP are included in the definition of OUD
                treatment services and would be paid under the bundled payment.
                Toxicology tests that are unrelated to the care and treatment for OUD
                at an OTP may be paid separately under the CLFS, if reasonable and
                necessary, since toxicology tests for these purposes are not included
                in the bundled payments to OTPs. CMS expects that the ordering
                [[Page 62634]]
                practitioner would document the medical necessity for this additional
                testing in the beneficiary's medical record.
                    Comment: Many commenters supported the inclusion of intake
                activities, such as the initial physician examination, initial
                assessment and preparation of a treatment plan, as well as periodic
                assessments in the definition of OUD treatment services. One of the
                commenters noted these were significant activities performed by the
                treatment teams that were not included in the proposed bundle, nor are
                they paid for separately in the OTPs, and stated these services should
                be included. Another commenter stated that initial assessment and
                treatment planning activities are generally the first part of OUD
                treatment and that treatment planning cannot always be linear and must,
                at times, be revised. The commenter noted that these activities are
                typical of any substance abuse treatment program and should be included
                in the definition of OUD treatment services.
                    Response: We agree with commenters that intake activities, such as
                the initial physician examination, initial assessment and preparation
                of a treatment plan, should be included in the definition of OUD
                treatment services. We also agree with commenters that periodic
                assessment should be included in the definition of OUD treatment
                services. We note that an initial medical examination and both initial
                and periodic assessments are required under the SAMHSA regulations.
                Specifically, under the SAMHSA requirements at Sec.  8.12(f)(2), OTPs
                shall require each patient to undergo a complete, fully documented
                physical evaluation by a program physician or a primary care physician,
                or an authorized healthcare professional under the supervision of a
                program physician, before admission to the OTP. The full medical
                examination, including the results of serology and other tests, must be
                completed within 14 days following admission.
                    Under Sec.  8.12(f)(4), OTPs are required to do initial and
                periodic assessments. Each patient accepted for treatment at an OTP
                shall be assessed initially and periodically by qualified personnel to
                determine the most appropriate combination of services and treatment.
                The initial assessment must include preparation of a treatment plan
                that includes: The patient's short-term goals and the tasks the patient
                must perform to complete the short-term goals; the patient's
                requirements for education, vocational rehabilitation, and employment;
                and the medical, psychosocial, economic, legal, or other supportive
                services that a patient needs. The treatment plan also must identify
                the frequency with which these services are to be provided. The plan
                must be reviewed and updated to reflect that patient's personal
                history, his or her current needs for medical, social, and
                psychological services, and his or her current needs for education,
                vocational rehabilitation, and employment services. We understand that
                intake activities and periodic assessments are integral services for
                the establishment and maintenance of OUD treatment for a beneficiary at
                an OTP. Therefore, we are believe it is reasonable to include these
                services in the definition of OUD treatment services. Accordingly, we
                are finalizing a revised definition of OUD treatment services in Sec.
                410.67(b) that reflects the required intake activities and periodic
                assessments. We discuss coding and payment for these services in the
                Coding section below.
                    Comment: A few commenters requested that CMS publish a detailed
                list of the items and services that are covered as OUD treatment
                services and would be included in the bundled payment to the OTPs.
                    Response: The items and services included in the definition of OUD
                treatment services are listed in the preamble of this final rule and in
                the regulations at Sec.  410.67(b). We note that the items and services
                that are medically-necessary for OUD treatment could in some cases also
                be furnished and billed by other Medicare practitioners under another
                Medicare benefit category. For example, we anticipate that some
                beneficiaries receiving counseling or therapy as part of an OTP bundle
                of services may also be receiving medically reasonable and necessary
                counseling or therapy as part of a physician's service during the same
                time period. In this scenario, the counseling or therapy provided as
                part of a physician's service could be billed separately.
                    Comment: One commenter supported a definition of OUD treatment
                services that would allow for coverage of innovative therapies in
                development that have not yet been approved by the FDA for treatment of
                OUD. The commenter suggested changing the proposed regulatory language
                in Sec.  410.67(b)(1) to ``Therapies approved by the Food and Drug
                Administration under section 505 of the Federal, Food, Drug, and
                Cosmetic Act for use in treatment of opioid use disorder.'' A few
                commenters recommended that drugs used for opioid detoxification
                withdrawal and management maintenance such as naloxone, clonidine, and
                lofexidine be included in the definition of OUD treatment services.
                    Response: We thank the commenters for their feedback on including
                drugs that are not opioid agonist or antagonist medications in the
                definition of OUD treatment services. For CY 2020, we are finalizing a
                definition of OUD treatment services that reflects the statutory
                requirement in section 1861(jjj)(1)(A) of the Act to include opioid
                agonist and antagonist treatment medications approved by the FDA in the
                definition of OUD treatment services. We will consider these comments
                on additional drugs to include in the definition of OUD treatment
                services under our discretionary authority in section 1861(jjj)(1)(F)
                of the Act as we continue to work on refining this new Medicare benefit
                in future rulemaking.
                    Comment: In response to the request for comment on adding various
                other types of items and services to the definition of OUD treatment
                services, several commenters indicated that case management and care
                coordination are services furnished by OTPs and should be included in
                the definition of OUD treatment services. Some commenters also
                requested that peer-to-peer support, crisis management, and non-opioid
                alternative treatment be included in the definition of OUD treatment
                services. One commenter urged CMS to include Medical Nutrition Therapy
                services that are furnished by registered dietician nutritionists as a
                core component of OTPs because individuals with OUD suffer from
                gastrointestinal issues, eating disorders and malnutrition. The
                commenter stated it is essential that CMS build a payment model that
                leverages the different expertises of the full health care team,
                including registered dietician nutritionists. Another commenter urged
                CMS to include physical therapy within the list of OUD treatment
                services and recommended adjusting the bundled payment rates to account
                for instances in which effective treatment requires physical therapy
                and other nonpharmacological treatment services. Some commenters noted
                that the proposed bundled payment should include both e-prescribing and
                behavioral health information technology consultation and support
                services. One commenter urged that the definition of OUD treatment
                services include services performed by pharmacists including
                psychiatric pharmacists, such as medication adherence, management, and
                education or counseling. Some commenters suggested adding other
                laboratory tests, including HIV, Hepatitis, liver disease,
                [[Page 62635]]
                or infectious diseases. Other commenters noted SAMHSA requirements for
                treatment for tobacco use disorder, alcohol use disorder, and family
                services for OTPs and recommended that these should be included in the
                definition of OUD treatment.
                    Response: We appreciate the comments recommending additional types
                of items and services that could be added to the definition of OUD
                treatment services. For CY 2020, we are finalizing a definition of OUD
                treatment services that includes those items and services that we
                understand are required for all OTPs to furnish as specified in SAMHSA
                regulations (part 8). Because this is the first year of the OTP
                benefit, we believe it would be premature to include in the definition
                additional items and services until we have additional information
                regarding their use by OTPs in the treatment of Medicare beneficiaries
                with OUD. However, we note that the definition of OUD treatment
                services does not prevent an OTP from furnishing the additional items
                and services suggested above in accordance with best practices as
                clinically appropriate, SAMHSA regulations and guidance, and State law.
                We may consider the items and services suggested by commenters further
                as we continue to work on refining this new Medicare benefit in future
                rulemaking. Accordingly, we are interested in continued feedback and
                data on the specific items and services, including their frequency,
                furnished to beneficiaries by an OTP.
                    After consideration of the public comments, we are finalizing our
                proposal to include the five statutorily-required items and services in
                the definition of OUD treatment services in Sec.  410.67(b). For the
                reasons discussed previously, we will also include intake activities
                and periodic assessments required under Sec.  8.14(f)(4) in the
                definition of OUD treatment services in Sec.  410.67(b).
                b. Opioid Treatment Program
                    Section 2005 of the SUPPORT Act also amended section 1861 of the
                Act by adding a new subsection (jjj)(2) to define an OTP as an entity
                meeting the definition of OTP in 42 CFR 8.2 or any successor regulation
                (that is, a program or practitioner engaged in opioid treatment of
                individuals with an opioid agonist treatment medication registered
                under 21 U.S.C. 823(g)(1)), that meets the additional requirements set
                forth in subparagraphs (A) through (D) of section 1861(jjj)(2) of the
                Act. Specifically, the OTP:
                     Is enrolled under section 1866(j) of the Act;
                     Has in effect a certification by SAMHSA for such a
                program;
                     Is accredited by an accrediting body approved by SAMHSA;
                and
                     Meets such additional conditions as the Secretary may find
                necessary to ensure the health and safety of individuals being
                furnished services under such program and the effective and efficient
                furnishing of such services.
                    These requirements are discussed in more detail in this section.
                (1) Enrollment
                    As discussed previously, under section 1861(jjj)(2)(A) of the Act,
                an OTP must be enrolled in Medicare to receive Medicare payment for
                covered OUD treatment services under section 1861(jjj)(1) of the Act.
                We refer the reader to section III.H. of this final rule, Medicare
                Enrollment of Opioid Treatment Programs, for further details on our
                policies related to enrollment of OTPs.
                (2) Certification by SAMHSA
                    As provided in section 1861(jjj)(2)(B) of the Act, OTPs must be
                certified by SAMHSA to furnish Medicare-covered OUD treatment services.
                SAMHSA has created a system to certify and accredit OTPs, which is
                governed by part 8, subparts B and C. This regulatory framework allows
                SAMHSA to focus its oversight efforts on improving treatment rather
                than solely ensuring that OTPs are meeting regulatory criteria, and
                preserves states' authority to regulate OTPs. To be certified by
                SAMHSA, OTPs must comply with the federal opioid treatment standards as
                outlined in Sec.  8.12, be accredited by a SAMHSA-approved
                accreditation body, and comply with any other conditions for
                certification established by SAMHSA. Specifically, SAMHSA requires OTPs
                to provide the following services:
                     General--OTPs shall provide adequate medical, counseling,
                vocational, educational, and other assessment and treatment services.
                     Initial medical examination services--OTPs shall require
                each patient to undergo a complete, fully documented physical
                evaluation by a program physician or a primary care physician, or an
                authorized healthcare professional under the supervision of a program
                physician, before admission to the OTP.
                     Special services for pregnant patients--OTPs must maintain
                current policies and procedures that reflect the special needs of
                patients who are pregnant. Prenatal care and other gender specific
                services for pregnant patients must be provided either by the OTP or by
                referral to appropriate healthcare providers.
                     Initial and periodic assessment services--Each patient
                accepted for treatment at an OTP shall be assessed initially and
                periodically by qualified personnel to determine the most appropriate
                combination of services and treatment.
                     Counseling services--OTPs must provide adequate substance
                abuse counseling to each patient as clinically necessary by a program
                counselor, qualified by education, training, or experience to assess
                the patient's psychological and sociological background.
                     Drug abuse testing services--OTPs must provide adequate
                testing or analysis for drugs of abuse, including at least eight random
                drug abuse tests per year, per patient in maintenance treatment, in
                accordance with generally accepted clinical practice. For patients in
                short-term detoxification treatment, defined in Sec.  8.2 as
                detoxification treatment not in excess of 30 days, the OTP shall
                perform at least one initial drug abuse test. For patients receiving
                long-term detoxification treatment, the program shall perform initial
                and monthly random tests on each patient.
                    The provisions governing recordkeeping and patient confidentiality
                at Sec.  8.12(g)(1) require that OTPs shall establish and maintain a
                recordkeeping system that is adequate to document and monitor patient
                care. All records are required to be kept confidential in accordance
                with all applicable federal and state requirements. The requirements at
                Sec.  8.12(g)(2) state that OTPs shall document in each patient's
                record that the OTP made a good faith effort to review whether or not
                the patient is enrolled in any other OTP. A patient enrolled in an OTP
                shall not be permitted to obtain treatment in any other OTP except in
                exceptional circumstances, as determined by the medical director or
                program physician of the OTP in which the patient is enrolled (Sec.
                8.12(g)(2)). Additionally, the requirements at Sec.  8.12(h) address
                medication administration, dispensing, and use.
                    SAMHSA requires that OTPs shall ensure that opioid agonist
                treatment medications are administered or dispensed only by a
                practitioner licensed under the appropriate state law and registered
                under the appropriate state and federal laws to administer or dispense
                opioid drugs, or by an agent of such a practitioner, supervised by and
                under the order of the licensed practitioner. OTPs shall use only those
                [[Page 62636]]
                opioid agonist treatment medications that are approved by the FDA for
                use in the treatment of OUD. They must maintain current procedures that
                are adequate to ensure that the dosing requirements are met, and each
                opioid agonist treatment medication used by the program is administered
                and dispensed in accordance with its approved product labeling.
                    At Sec.  8.12(i), regarding unsupervised or ``take-home'' use of
                opioid agonist treatment medications, SAMHSA has specified that OTPs
                must follow requirements specified by SAMHSA to limit the potential for
                diversion of opioid agonist treatment medications to the illicit market
                when dispensed to patients as take-homes, including maintaining current
                procedures to identify the theft or diversion of take-home medications.
                The requirements at Sec.  8.12(j) for interim maintenance treatment,
                state that the program sponsor of a public or nonprofit private OTP
                subject to the approval of SAMHSA and the state, may place an
                individual, who is eligible for admission to comprehensive maintenance
                treatment, in interim maintenance treatment if the individual cannot be
                placed in a public or nonprofit private comprehensive program within a
                reasonable geographic area and within 14 days of the individual's
                application for admission to comprehensive maintenance treatment.
                Patients in interim maintenance treatment are permitted to receive
                daily dosing, but take-homes are not permitted. During interim
                maintenance treatment, initial treatment plans and periodic treatment
                plan evaluations are not required and a primary counselor is not
                required to be assigned to the patient. The OTP must be able to
                transfer these patients from interim maintenance into comprehensive
                maintenance treatment within 120 days. Interim maintenance treatment
                must be provided in a manner consistent with all applicable federal and
                state laws.
                    The SAMHSA requirements at Sec.  8.12(b) address administrative and
                organizational structure, requiring that an OTP's organizational
                structure and facilities shall be adequate to ensure quality patient
                care and meet the requirements of all pertinent federal, state, and
                local laws and regulations. At a minimum, each OTP shall formally
                designate a program sponsor and medical director who is a physician who
                is licensed to practice medicine in the jurisdiction in which the OTP
                is located. The program sponsor shall agree on behalf of the OTP to
                adhere to all requirements set forth in part 8, subpart C, and any
                regulations regarding the use of opioid agonist treatment medications
                in the treatment of OUD that may be promulgated in the future. The
                medical director shall assume responsibility for administering all
                medical services performed by the OTP. In addition, the medical
                director shall be responsible for ensuring that the OTP is in
                compliance with all applicable federal, state, and local laws and
                regulations.
                    The provision governing patient admission criteria at Sec.  8.12(e)
                requires that an OTP shall maintain current procedures designed to
                ensure that patients are admitted to maintenance treatment by qualified
                personnel who have determined, using accepted medical criteria such as
                those listed in the Diagnostic and Statistical Manual of Mental
                Disorders, that the person has had an OUD for at least 1 year before
                admission for treatment. If under 18 years of age, the patient is
                required to have had two documented unsuccessful attempts at short-term
                detoxification or drug-free treatment within a 12-month period and have
                the written consent of a parent, legal guardian, or responsible adult
                designated by the relevant state authority, to be eligible for
                maintenance treatment.
                    To ensure continuous quality improvement, the requirements at Sec.
                8.12(c) state that an OTP must maintain current quality assurance and
                quality control plans that include, among other things, annual reviews
                of program policies and procedures and ongoing assessment of patient
                outcomes, and a current Diversion Control Plan as part of its quality
                assurance program.
                    The requirements at Sec.  8.12(d) with respect to staff
                credentials, state that each person engaged in the treatment of OUD
                must have sufficient education, training, and experience, or any
                combination thereof, to enable that person to perform the assigned
                functions. In addition, all physicians, nurses, and other licensed
                professional care providers, including addiction counselors, must
                comply with the credentialing requirements of their respective
                professions.
                    In addition to meeting the criteria described above, OTPs must
                apply to SAMHSA for certification. As part of the conditions for
                certification, SAMHSA specifies that OTPs shall:
                     Comply with all pertinent state laws and regulations.
                     Allow inspections and surveys by duly authorized employees
                of SAMHSA, by accreditation bodies, by the DEA, and by authorized
                employees of any relevant State or federal governmental authority.
                     Comply with the provisions of 42 CFR part 2 (regarding
                confidentiality of SUD patient records).
                     Notify SAMHSA within 3 weeks of any replacement or other
                change in the status of the program sponsor or medical director.
                     Comply with all regulations enforced by the DEA under 21
                CFR chapter II, and be registered by the DEA before administering or
                dispensing opioid agonist treatment medications.
                     Operate in accordance with federal opioid treatment
                standards and approved accreditation elements.
                    Furthermore, SAMHSA has issued additional guidance for OTPs that
                describes how programs can achieve and maintain compliance with federal
                regulations.\34\
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                (3) Accreditation of OTPs by a SAMHSA-Approved Accrediting Body
                    As provided in section 1861(jjj)(2)(C) of the Act, OTPs must be
                accredited by a SAMHSA-approved accrediting body in order to furnish
                Medicare-covered OUD treatment services. In 2001, the Department of
                Health and Human Services (HHS) and SAMHSA issued final regulations to
                establish a new oversight system for the treatment of SUDs with MAT
                (part 8). SAMHSA-approved accrediting bodies evaluate OTPs and perform
                site visits to ensure SAMHSA's opioid dependency treatment standards
                are met. SAMHSA also requires OTPs to be accredited by a SAMHSA-
                approved accrediting body (Sec.  8.11).
                    The SAMHSA regulations establish procedures for an entity to apply
                to become a SAMHSA-approved accrediting body (Sec.  8.3). When
                determining whether to approve an applicant as an accreditation body,
                SAMHSA examines the following:
                     Evidence of the nonprofit status of the applicant (that
                is, of fulfilling Internal Revenue Service requirements as a nonprofit
                organization) if the applicant is not a state governmental entity or
                political subdivision;
                     The applicant's accreditation elements or standards and a
                detailed discussion showing how the proposed accreditation elements or
                standards will ensure that each OTP surveyed by the applicant is
                qualified to meet or is meeting each of the federal opioid treatment
                standards set forth in Sec.  8.12;
                     A detailed description of the applicant's decision-making
                process, including:
                    ++ Procedures for initiating and performing onsite accreditation
                surveys of OTPs;
                [[Page 62637]]
                    ++ Procedures for assessing OTP personnel qualifications;
                    ++ Copies of an application for accreditation, guidelines,
                instructions, and other materials the applicant will send to OTPs
                during the accreditation process;
                    ++ Policies and procedures for notifying OTPs and SAMHSA of
                deficiencies and for monitoring corrections of deficiencies by OTPs;
                for suspending or revoking an OTP's accreditation; and to ensure
                processing of applications for accreditation and for renewal of
                accreditation within a timeframe approved by SAMHSA; and;
                    ++ A description of the applicant's appeals process to allow OTPs
                to contest adverse accreditation decisions.
                     Policies and procedures established by the accreditation
                body to avoid conflicts of interest, or the appearance of conflicts of
                interest;
                     A description of the education, experience, and training
                requirements for the applicant's professional staff, accreditation
                survey team membership, and the identification of at least one licensed
                physician on the applicant's staff;
                     A description of the applicant's training policies;
                     Fee schedules, with supporting cost data;
                     Satisfactory assurances that the applicant will comply
                with the requirements of Sec.  8.4, including a contingency plan for
                investigating complaints under Sec.  8.4(e);
                     Policies and procedures established to protect
                confidential information the applicant will collect or receive in its
                role as an accreditation body; and
                     Any other information SAMHSA may require.
                    SAMHSA periodically evaluates the performance of accreditation
                bodies primarily by inspecting a selected sample of the OTPs accredited
                by the accrediting body and by evaluating the accreditation body's
                reports of surveys conducted, to determine whether the OTPs surveyed
                and accredited by the accreditation body are in compliance with the
                federal opioid treatment standards. There are currently six SAMHSA-
                approved accreditation bodies.\35\
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                (4) Provider Agreement
                    Section 2005(d) of the SUPPORT Act amended section 1866(e) of the
                Act by adding a new paragraph (3) which includes OTPs (but only with
                respect to the furnishing of OUD treatment services) as a ``provider of
                services'' for purposes of section 1866 of the Act. All providers of
                services under section 1866 of the Act must enter into a provider
                agreement with the Secretary and comply with other requirements
                specified in that section. These requirements are codified at 42 CFR
                part 489. Therefore, we proposed to amend part 489 to include OTPs (but
                only for furnishing OUD treatment services) as a provider.
                Specifically, we proposed to add OTPs (but only for the furnishing of
                OUD treatment services) to the list of providers in Sec.  489.2. This
                addition makes clear that the other requirements specified in section
                1866 of the Act, and implemented in part 489, which include the limits
                on charges to beneficiaries, will apply to OTPs (in connection with the
                furnishing of OUD treatment services). We also proposed additional
                changes to make clear that certain parts of part 489, which implement
                statutory requirements other than section 1866 of the Act, do not apply
                to OTPs. For example, since we did not propose any conditions of
                participation for OTPs, we proposed to amend Sec.  489.10(a), which
                states that providers specified in Sec.  489.2 must meet conditions of
                participation, to add that OTPs must meet the requirements set forth in
                part 489 and elsewhere in that chapter. In addition, we proposed to
                specify that the effective date of the provider agreement is the date
                on which CMS accepts a signed agreement (proposed amendment to Sec.
                489.13(a)(2)), and is not dependent on surveys or an accrediting
                organization's determination related to conditions of participation. As
                noted earlier in the preamble to this final rule, OTPs are required to
                be certified by SAMHSA and accredited by an accrediting body approved
                by SAMHSA. In Sec.  489.53, we proposed to create a basis for
                termination of the provider agreement if the OTP no longer meets the
                requirements set forth in part 489 or elsewhere in that chapter
                (including if it no longer has a SAMHSA certification or accreditation
                by a SAMHSA-approved accrediting body). Finally, we proposed to revise
                42 CFR part 498 to ensure that OTPs have access to the appeal process
                in case of an adverse determination concerning continued participation
                in the Medicare program. Specifically, we proposed to amend the
                definition of provider in Sec.  498.2 to include OTPs. We also
                indicated that we would continue to review the application of the
                provider agreement requirements to OTPs to determine whether any
                further amendments to parts 489 and 498 were needed to ensure that the
                existing provider agreement regulations are applied to OTPs consistent
                with our proposals and section 2005 of the SUPPORT Act.
                    Comment: Multiple commenters questioned whether provider
                agreements, once executed, will be made retroactive to January 1, 2020.
                    Response: We proposed in Sec.  489.13(a)(2)(i) that the effective
                date of an OTP provider agreement would be the date on which we accept
                a signed agreement that ensures that the OTP meets all federal
                requirements. Yet, as discussed in section III.H of the final rule we
                also proposed retrospective billing dates in Sec.  424.520(d) and Sec.
                424.521(a) if the requirements of those sections were met. To ensure
                that the provider agreement and billing effective dates are uniform, we
                are not finalizing our proposed change to Sec.  489.13(a)(2)(i).
                Instead, we will establish a new Sec.  489.13(a)(2)(iii) stating that
                the provider agreement effective date is to be consistent with the
                billing effective date established pursuant Sec.  424.520(d) or Sec.
                424.521(a), as applicable. In sum, the effective dates of OTP provider
                agreements will not automatically be made retroactive to January 1,
                2020, but will instead be governed by Sec.  489.13(a)(2)(iii).
                    After consideration of comments received, we are making changes to
                Sec.  489.13(a)(2)(i) to align with the provider agreement effective
                date to the billing effective date under Sec.  424.520(d) or Sec.
                424.521(a), as applicable. We did not receive any other comments on the
                proposals for the provider agreement requirements in Sec. Sec.  489.2,
                489.10, 489.43, and 498.2., and are finalizing these changes as
                proposed.
                (5) Additional Conditions
                    As provided in section 1861(jjj)(2)(D) of the Act, to furnish
                Medicare-covered OUD treatment services, OTPs must meet any additional
                conditions as the Secretary may find necessary to ensure the health and
                safety of individuals being furnished services under such program and
                the effective and efficient furnishing of such services. The
                comprehensive OTP standards for certification of OTPs address the same
                topics as would be addressed by CMS supplier standards, such as client
                assessment and the services required to be provided. Furthermore, the
                detailed process established by SAMHSA for selecting and overseeing its
                accreditation organizations is similar to the accrediting organization
                oversight process that would typically be established by CMS. Thus, in
                the proposed rule, we stated that we believe the existing SAMHSA
                certification and accreditation requirements are both
                [[Page 62638]]
                appropriate and sufficient to ensure the health and safety of
                individuals being furnished services by OTPs, as well as the effective
                and efficient furnishing of such services. We also indicated that we
                believe that creating additional conditions at this time for
                participation in Medicare by OTPs could create unnecessary regulatory
                duplication and could be potentially burdensome for OTPs. Therefore, we
                did not propose any additional conditions for participation in Medicare
                by OTPs in the CY 2020 PFS proposed rule. We solicited public comments
                on our proposed approach, including input on whether there are any
                additional conditions that should be required for OTPs furnishing
                Medicare-covered OUD treatment services.
                (6) Proposed Definition of Opioid Treatment Program
                    We proposed to define ``opioid treatment program'' at Sec.
                410.67(b) as an entity that is an OTP as defined in Sec.  8.2 (or any
                successor regulation) and meets the applicable requirements for an OTP.
                We proposed to codify this definition at Sec.  410.67(b). In addition,
                we proposed that for an OTP to participate and receive payment under
                the Medicare program, the OTP must be enrolled under section 1866(j) of
                the Act, have in effect a certification by SAMHSA for such a program,
                and be accredited by an accrediting body approved by SAMHSA. We also
                proposed that an OTP must have a provider agreement as required by
                section 1866(a) of the Act. We proposed to codify these requirements at
                Sec.  410.67(c). We solicited public comments on the proposed
                definition of OTP and the proposed Medicare requirements for OTPs.
                    The following is a summary of the comments we received and our
                responses.
                    Comment: Commenters generally supported the proposed definition of
                OTP, including the requirements that OTPs be enrolled under section
                1866(j) of the Act, have in effect a certification by SAMHSA for such a
                program, and be accredited by an accrediting body approved by SAMHSA.
                One commenter stated that these policies represent only the start of an
                ongoing effort to address the opioid epidemic.
                    Response: We appreciate the support for the proposed definition of
                OTPs. We understand the importance of combating the opioid epidemic and
                intend to monitor the implementation of this new Medicare benefit and
                may propose further refinements in future rulemaking. After
                consideration of the comments received, we are finalizing our proposed
                definition of ``opioid treatment program'' at Sec.  410.67(b).
                    Comment: Commenters supported the proposed Medicare requirements
                for OTPs, including the requirement that they have in effect a provider
                agreement with the Secretary. One commenter welcomed CMS' reminder to
                providers that being a Medicare provider carries with it a limit on
                charges to beneficiaries, and stated that in addition to the proposal
                for zero cost sharing for OTP services, this policy would help to
                protect beneficiary access to care and economic security.
                    Response: We appreciate the support for the proposal to require
                OTPs to enter into a provider agreement and are finalizing this
                requirement at Sec.  410.67(c), along with Sec.  424.67(b).
                Additionally, we reiterate that as indicated in the Health Insurance
                Benefit Agreement (Form CMS-1561),\36\ the provider agrees to conform
                to the provisions of section 1866 of the Social Security Act and the
                applicable provisions in Title 42 Code of Federal Regulations (CFR),
                which in part establish the requirement that a provider must accept
                assignment of Medicare payment.
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                    Comment: Many commenters supported CMS' view that the comprehensive
                OTP standards for certification of OTPs established by SAMHSA address
                the same topics as would be addressed by CMS conditions of
                participation, and that the detailed process established by SAMHSA for
                selecting and overseeing its accreditation organizations is similar to
                the accrediting organization oversight process that would typically be
                established by CMS. Furthermore, commenters agreed with CMS' conclusion
                that the existing SAMHSA certification and accreditation requirements
                are both appropriate and sufficient to ensure the health and safety of
                individuals receiving services from OTPs, as well as the effective and
                efficient furnishing of such services. Commenters also noted the
                regulations established by the DEA and the regulations established by
                states for licensure purposes as additional assurances of patient
                health and safety. The commenters agreed that creating additional
                conditions at this time for participation in Medicare by OTPs could
                create unnecessary regulatory duplication and could be potentially
                burdensome for OTPs. Thus, the commenters supported the proposal to
                accept the existing SAMHSA requirements for certification and
                accreditation as the health and safety standards that must be met in
                order for an OTP to participate in Medicare.
                    Response: We are finalizing our proposal to adopt the existing
                SAMHSA requirements for certification and accreditation as the health
                and safety standards that must be met in order for an OTP to
                participate in Medicare. This approach will avoid unnecessary
                regulatory duplication while assuring Medicare beneficiary safety at
                OTPs.
                    After consideration of the comments, we are finalizing the proposed
                definition of ``opioid treatment program'' at Sec.  410.67(b). We are
                also finalizing the proposed Medicare requirements for OTPs at Sec.
                410.67(c). Specifically, in order for an OTP to participate and receive
                payment under the Medicare program, the OTP must be enrolled under
                section 1866(j) of the Act, have in effect certification by SAMHSA, and
                be accredited by an accrediting body approved by SAMHSA. Additionally,
                we are finalizing our proposal that an OTP must have a provider
                agreement as required by section 1866(a) of the Act.
                3. Bundled Payments for OUD Treatment Services
                    Section 1834(w) of the Act, added by section 2005 of the SUPPORT
                Act, directs the Secretary to pay to the OTP an amount that is equal to
                100 percent of a bundled payment for OUD treatment services that are
                furnished by the OTP to an individual during an episode of care. We
                proposed to establish bundled payments for OUD treatment services
                which, as discussed above, would include the medications approved by
                the FDA under section 505 of the FFDCA for use in the treatment of OUD;
                the dispensing and administration of such medication, if applicable;
                substance use counseling; individual and group therapy; and toxicology
                testing. In calculating the bundled payments, we proposed to apply
                separate payment methodologies for the drug component (which includes
                the medications approved by the FDA under section 505 of the FFDCA for
                use in the treatment of OUD) and the non-drug component (which includes
                the dispensing and administration of such medications, if applicable;
                substance use counseling; individual and group therapy; and toxicology
                testing) of the bundled payments. We proposed to calculate the full
                bundled payment rate by combining the drug component and the non-drug
                components. We outlined our proposals for determining the bundled
                payments for OUD treatment services addressing payment rates for these
                services under the Medicaid and
                [[Page 62639]]
                TRICARE programs, duration of the episode of care for which the bundled
                payment is made (including partial episodes), methodology for
                determining bundled payment rates for the drug and non-drug components,
                site of service, coding and beneficiary cost sharing. We proposed to
                codify the methodology for determining the bundled payment rates for
                OUD treatment services at Sec.  410.67(d).
                    We received a number of public comments on the proposed approach to
                calculating the full bundled payment rate. The following is a summary
                of the comments we received and our responses.
                    Comment: A few commenters supported the proposal to calculate the
                full bundled payment rate by combining the drug component and the non-
                drug components. Another commenter stated that clinical services, such
                as individual and group counseling, should be billed separately from
                the medication.
                    Response: Section 1861(jjj) of the Act defines OUD treatment
                services to include certain opioid treatment medications furnished by
                an OTP, as well as other services such as substance use counseling and
                individual and group therapy. Section 1834(w) of the Act instructs the
                Secretary to make a bundled payment for the services that are furnished
                by an OTP to an individual during an episode of care. We do not believe
                the statute supports unbundling the medications from the other OUD
                treatment services furnished by OTPs during the same episode of care.
                    After consideration of the public comments, we are finalizing our
                proposal to calculate the full bundled payment rate for services
                furnished by OTPs by combining the drug component and the non-drug
                components. We are codifying the methodology for determining the
                bundled payment rates for OUD treatment services at Sec.  410.67(d).
                a. Review of Medicaid and TRICARE Programs
                    Section 1834(w)(2) of the Act, added by section 2005(c) of the
                SUPPORT Act, provides that in developing the bundled payment rates for
                OUD treatment services furnished by OTPs, the Secretary may consider
                payment rates paid to the OTPs for comparable services under the state
                plans under title XIX of the Act (Medicaid) or under the TRICARE
                program under chapter 55 of title 10 of the United States Code
                (U.S.C.). The payments for comparable services under TRICARE and
                Medicaid programs are discussed below. In the proposed rule, we
                acknowledged that many private payers cover services furnished by OTPs,
                and welcomed comment on the scope of private payer OTP coverage and the
                payment rates private payers have established for OTPs furnishing
                comparable OUD treatment services. We also indicated that we might
                consider this information as part of the development of the final
                bundled payment rates for OUD treatment services furnished by OTPs.
                (1) TRICARE
                    In the ``TRICARE: Mental Health and Substance Use Disorder
                Treatment'' final rule, which appeared in the September 2, 2016 Federal
                Register (81 FR 61068) (hereinafter referred to as the 2016 TRICARE
                final rule), the Department of Defense (DOD) finalized its methodology
                for determining payments for services furnished to TRICARE
                beneficiaries by an OTP in the regulations at 32 CFR 199.14(a)(2)(ix).
                The payments are also described in Chapter 7, Section 5 and Chapter 1,
                Section 15 of the TRICARE Reimbursement Manual 6010.61-M, April 1,
                2015. As discussed in the 2016 TRICARE final rule, a number of
                commenters indicated that they believed the rates established by DOD
                are near market rates and acceptable (81 FR 61079).
                    In the 2016 TRICARE final rule, DOD established separate payment
                methodologies for treatment in OTPs based on the particular medication
                being administered. DOD finalized a weekly all-inclusive per diem rate
                for OTPs when furnishing methadone for MAT. Under 32 CFR
                199.14(a)(2)(ix)(A)(3)(i), this weekly rate includes the cost of the
                drug and the cost of related non-drug services (that is, the costs
                related to intake/assessment, drug dispensing and screening and
                integrated psychosocial and medical treatment and supportive services),
                hereafter referred as the non-drug services. In the proposed rule (84
                FR 40524), we noted that the services included in the TRICARE weekly
                bundle are generally comparable to the definition of OUD treatment
                services in section 2005 of the SUPPORT Act. The weekly all-inclusive
                per diem rate for these services was determined based on preliminary
                review of industry billing practices (which included Medicaid and other
                third-party payers) for the dispensing of methadone, including an
                estimated daily drug cost of $3 and a daily estimated cost of $15 for
                the non-drug services. These daily costs were converted to an estimated
                weekly per diem rate of $126 ($18 per day x 7 days) in the 2016 TRICARE
                final rule. Under 32 CFR 199.14(a)(2)(iv)(C)(2), this rate is updated
                annually by the Medicare hospital inpatient prospective payment system
                (IPPS) update factor. The 2019 TRICARE weekly per diem rate for
                methadone treatment in an OTP is $133.15.\37\ Beneficiary cost-sharing
                consists of a flat copayment that may be applied to this weekly rate.
                ---------------------------------------------------------------------------
                    \37\ https://health.mil/Military-Health-Topics/Business-Support/Rates-and-Reimbursement/MHSUD-Facility-Rates.
                ---------------------------------------------------------------------------
                    DOD also established payment rates for other medications used for
                MAT (buprenorphine and extended-release injectable naltrexone) to allow
                OTPs to bill for the full range of medications available. Under 32 CFR
                199.14(a)(2)(ix)(A)(3)(ii), DOD established a fee-for-service (FFS)
                payment methodology for buprenorphine and extended-release injectable
                naltrexone because they are more likely to be prescribed and
                administered in an office-based treatment setting but are still
                available for treatment furnished in an OTP. DOD stated in the 2016
                TRICARE final rule (81 FR 61080) that treatment with buprenorphine and
                naltrexone is more variable in dosage and frequency than with
                methadone. Therefore, TRICARE pays for these medications and the
                accompanying non-drug services separately on a FFS basis. Buprenorphine
                is paid based on 95 percent of average wholesale price (AWP) and the
                non-drug component is paid on a per visit basis at an estimated cost of
                $22.50 per visit. Extended-release injectable naltrexone is paid at the
                average sales price (ASP) plus a drug administration fee while the non-
                drug services are also paid at an estimated per visit cost of $22.50.
                DOD also reserved discretion to establish the payment methodology for
                new drugs and biologicals that may become available for the treatment
                of SUDs in OTPs.
                    DOD instructed that OTPs use the ``Alcohol and/or other drug use
                services, not otherwise specified'' H-code for billing the non-drug
                services when buprenorphine or naltrexone is used, and required OTPs to
                also include both the J-code and the National Drug Code (NDC) for the
                drug used, as well as the dosage and acquisition cost on the claim
                form.\38\ Drugs listed on Medicare's Part B ASP files are paid using
                the ASP.\39\ Drugs not appearing on the Medicare ASP file are paid at
                the lesser of billed
                [[Page 62640]]
                charges or 95 percent of the AWP.\40\ Using this methodology, TRICARE
                estimated a daily drug cost of $10 for buprenorphine and a monthly drug
                cost of $1,129 for extended-release injectable naltrexone.\41\
                ---------------------------------------------------------------------------
                    \38\ 81 FR 61080.
                    \39\ https://manuals.health.mil/pages/DisplayManualHtmlFile/TR15/30/AsOf/TR15/C7S5.html; https://manuals.health.mil/pages/DisplayManualHtmlFile/TR15/30/AsOf/TR15/c1s15.html2FM10546.
                    \40\ https://manuals.health.mil/pages/DisplayManualHtmlFile/TR15/30/AsOf/TR15/C7S5.html; https://manuals.health.mil/pages/DisplayManualHtmlFile/TR15/30/AsOf/TR15/c1s15.html2FM10546.
                    \41\ 81 FR 61080.
                ---------------------------------------------------------------------------
                (2) Medicaid (Title XIX)
                    States have the flexibility to administer the Medicaid program to
                meet their own needs within the Medicaid program parameters set forth
                in federal statute and regulations. All states cover and pay for some
                form of medications for MAT of OUD under their Medicaid programs.
                However, as of 2018, only 42 states covered methadone for MAT for OUD
                under their Medicaid programs.\42\ We note that section 1006(b) of the
                SUPPORT Act amended sections 1902 and 1905 of the Act to require that
                Medicaid State plans cover all drugs approved under section 505 of the
                FFDCA to treat OUD, including methadone, and all biological products
                licensed under section 351 of the Public Health Service Act to treat
                OUD, beginning October 1, 2020. This requirement sunsets on September
                30, 2025.
                ---------------------------------------------------------------------------
                    \42\ https://store.samhsa.gov/system/files/medicaidfinancingmatreport_0.pdf.
                ---------------------------------------------------------------------------
                    In reviewing Medicaid payments for OUD treatment services furnished
                by OTPs in a few states, we found significant variation in the MAT
                coverage, OUD treatment services, and payment structure among the
                states. Thus, it is difficult to identify a standardized Medicaid
                payment amount for OTP services. A number of factors such as the unit
                of payment, types of services bundled within a payment code, and how
                MAT services are paid varied among the states. For example, for
                treatment of OUD using methadone for MAT, most OTPs bill under HCPCS
                code H0020 (Alcohol and/or drug services; methadone administration and/
                or service (provision of the drug by a licensed program)) under the
                Medicaid program; however, the unit of payment varies by state from
                daily, weekly, or monthly. For example, the unit of payment in
                California is daily for methadone treatment,\43\ while the unit of
                payment in Maryland for methadone maintenance is weekly,\44\ and
                Vermont uses a monthly unit\45\ of payment of these OUD treatment items
                and services.
                ---------------------------------------------------------------------------
                    \43\ https://www.dhcs.ca.gov/formsandpubs/Documents/MHSUDS%20Information%20Notices/MHSUDS_Information_Notices_2018/MHSUDS_Information_Notice_18_037_SPA_Rates_Exhibit.pdf.
                    \44\ https://health.maryland.gov/bhd/Documents/Rebundling%20Initiative%209-6-16.pdf.
                    \45\ http://www.healthvermont.gov/sites/default/files/documents/pdf/ADAP_Medicaid%20Rate%20Sheet.pdf.
                ---------------------------------------------------------------------------
                    For the other MAT drugs, all states cover buprenorphine and the
                buprenorphine-naloxone medications;\46\ however, fewer than 70 percent
                cover the implanted or extended-release injectable versions of
                buprenorphine.\47\ In addition, all states cover the extended-release
                injectable naltrexone. \48\ We also found that many states pay
                different rates based on the specific type of drug used for MAT.
                ---------------------------------------------------------------------------
                    \46\ https://store.samhsa.gov/system/files/medicaidfinancingmatreport.pdf.
                    \47\ https://store.samhsa.gov/system/files/medicaidfinancingmatreport.pdf.
                    \48\ https://store.samhsa.gov/system/files/medicaidfinancingmatreport.pdf.
                ---------------------------------------------------------------------------
                    Non-drug items and services may be included in a bundled payment
                with the drug or paid separately, depending on the state, and can
                include dosing, dispensing and administration of the drug, individual
                and group counseling, and toxicology testing. In some states, certain
                services such as assessments, individual and group counseling, and
                toxicology testing can be billed separately. For example, some states
                (such as Maryland,\49\ Texas,\50\ and California \51\) separately
                reimburse for individual and group counseling services, while other
                states (such as Vermont \52\ and New Mexico \53\) include these
                services in the OUD bundled payment.
                ---------------------------------------------------------------------------
                    \49\ https://health.maryland.gov/bhd/Documents/Rebundling%20Initiative%209-6-16.pdf.
                    \50\ http://www.tmhp.com/News_Items/2018/11-Nov/11-16-18%20Substance%20Use%20Disorder%20Benefits%20to%20Change%20for%20Texas%20Medicaid%20January%201,%202019.pdf.
                    \51\ https://www.dhcs.ca.gov/formsandpubs/Documents/MHSUDS%20Information%20Notices/MHSUDS_Information_Notices_2018/MHSUDS_Information_Notice_18_037_SPA_Rates_Exhibit.pdf.
                    \52\ http://www.healthvermont.gov/sites/default/files/documents/pdf/ADAP_Medicaid%20Rate%20Sheet.pdf.
                    \53\ http://www.hsd.state.nm.us/uploads/FileLinks/e7cfb008157f422597cccdc11d2034f0/MAT_Proposed_reimb_MAD_website_pdf.pdf. https://stre.samhsa.gov/system/files/medicaidfinancingmatreport.pdfnm.us/uploads/FileLinks/c78b68d063e04ce5adffe29376ff402e/12_10_MAT_OTC_Clinics_Supp_09062012__2_.pdf.
                ---------------------------------------------------------------------------
                b. Aspects of the Bundle
                (1) Duration of Bundle
                    Section 1834(w)(1) of the Act requires the Secretary to pay an OTP
                an amount that is equal to 100 percent of the bundled payment for OUD
                treatment services that are furnished by the OTP to an individual
                during an episode of care (as defined by the Secretary) beginning on or
                after January 1, 2020. We proposed that the duration of an episode of
                care for OUD treatment services would be a week (that is, a contiguous
                7-day period that may start on any day of the week). As noted in the
                proposed rule, this is similar to the structure of the TRICARE bundled
                payment to OTPs for methadone, which is based on a weekly bundled rate
                (81 FR 61079), as well as the payments by some state Medicaid programs.
                Given this similarity to existing coding structures, we stated that we
                believe a weekly duration for an episode of care would be most familiar
                to OTPs, and therefore, the least disruptive to adopt. We proposed to
                define an episode of care at Sec.  410.67(b) as a 1-week (contiguous 7-
                day) period; however, we also solicited comments on whether we should
                consider a daily or monthly bundled payment.
                    We also recognized that patients receiving MAT are often on this
                treatment regimen for an indefinite amount of time, and therefore, we
                did not propose any maximum number of weeks during an overall course of
                treatment for OUD.
                    We received a number of public comments on the duration of the
                bundled payment. The following is a summary of the comments we received
                and our responses.
                    Comment: Many commenters supported the proposal to define an
                episode of care as a 1-week (contiguous 7-day) period, while several
                commenters stated that a monthly episode of care may be more
                appropriate in some circumstances, such as during the maintenance phase
                of treatment, and a few commenters supported daily bundles because that
                approach is more consistent with the payment structure under their
                state Medicaid program. Many commenters were supportive of our decision
                not to propose any maximum number of weeks for a course of treatment
                for OUD.
                    Response: While we recognize that the clinical needs of patients
                may differ depending on their stage of treatment, we are finalizing our
                proposal to define an episode of care as a 1-week (contiguous 7-day)
                period. OTPs are generally familiar with weekly episodes and we believe
                use of a weekly bundle will be less disruptive to the extent that an
                OTP already has processes in place to bill for weekly episodes. We
                recognize that patients receiving MAT are often on this treatment
                regimen for an indefinite amount of time, and therefore, we are not
                imposing any limit on the maximum number of weeks
                [[Page 62641]]
                during an overall course of treatment for OUD.
                    After consideration of the public comments, we are finalizing our
                proposal to define an episode of care as a 1-week (contiguous 7-day)
                period at Sec.  410.67(b). We are not finalizing any limit on the
                maximum number of weeks during an overall course of treatment for OUD.
                (a) Requirements for an Episode
                    In the proposed rule (84 FR 40525), we noted that SAMHSA requires
                OTPs to have a treatment plan for each patient that identifies the
                frequency with which items and services are to be provided (Sec.
                8.12(f)(4)). We recognized that there is a range of service intensity
                depending on the severity of a patient's OUD and stage of treatment,
                and therefore, a ``full weekly bundle'' may consist of a very different
                frequency of services for a patient in the initial phase of treatment
                compared to a patient in the maintenance phase of treatment, but that
                we would still consider the requirements to bill for the full weekly
                bundle to be met if the patient is receiving the majority of the
                services identified in their treatment plan at that time. However, for
                the purposes of valuation, we assumed one substance use counseling
                session, one individual therapy session, and one group therapy session
                per week and one toxicology test per month. Given the anticipated
                changes in service intensity over time based on the individual
                patient's needs, we explained that we expect that treatment plans would
                be updated to reflect these changes or noted in the patient's medical
                record, for example, in a progress note. In cases where the OTP has
                furnished the majority (51 percent or more) of the services identified
                in the patient's current treatment plan (including any changes noted in
                the patient's medical record) over the course of a week, we proposed
                that it could bill for a full weekly bundle. We proposed to codify the
                payment methodology for full episodes of care (as well as partial
                episodes of care and non-drug episodes of care, as discussed below) in
                Sec.  410.67(d)(2).
                    Comment: Several commenters stated that the frequency of services
                listed in the proposed rule for a typical case (we assumed one
                substance use counseling session, one individual therapy session, and
                one group therapy session per week and one toxicology test per month)
                would usually only occur during the initial phase of treatment/
                stabilization.
                    Response: We reiterate that we understand that the frequency of
                services will vary over time, and may be very different for a patient
                in the initial phase of treatment compared to a patient in the
                maintenance phase of treatment. We note that while we identified a set
                of services for purposes of calculating the payment rate for the weekly
                bundle, it is not a requirement for billing the bundled payment that
                all of those services be furnished in a given episode of care. Rather,
                as we discuss in more detail below, we are finalizing a policy under
                which the threshold to bill for an episode of care will be that at
                least one service was furnished to the patient during the week that
                corresponds to the episode of care.
                (b) Partial Episode of Care
                    As we explained in the proposed rule, we understand that there may
                be instances in which a beneficiary does not receive all of the
                services expected in a given week due to any number of issues,
                including, for example, an inpatient hospitalization during which a
                beneficiary would not be able to go to the OTP or inclement weather
                that impedes access to transportation. To provide more accurate payment
                to OTPs in cases where a beneficiary is not able to or chooses not to
                receive all items and services described in their treatment plan or the
                OTP is unable to furnish services, for example, in the case of a
                natural disaster, we proposed to establish separate payment rates for
                partial episodes that correspond with each of the full weekly bundles.
                In cases where the OTP has furnished at least one of the items or
                services (for example, dispensing one day of an oral MAT medication or
                one counseling session or one toxicology test) but less than 51 percent
                of the items and services included in OUD treatment services identified
                in the patient's current treatment plan (including any changes noted in
                the patient's medical record) over the course of a week, we proposed
                that it could bill for a partial weekly bundle. In cases in which the
                beneficiary does not receive a drug during the partial episode, we
                proposed that the code describing a non-drug partial weekly bundle must
                be used. For example, the OTP could bill for a partial episode in
                instances where the OTP is transitioning the beneficiary from one OUD
                medication to another and therefore the beneficiary is receiving less
                than a week of one type of medication. In those cases, two partial
                episodes could be billed, one for each of the medications, or one
                partial episode and one full episode, if all requirements for billing
                are met. We noted our intent to monitor this issue and to consider the
                need to make changes to this policy in future rulemaking to ensure that
                the billing for partial episodes is not being abused. We proposed to
                define a partial episode of care in Sec.  410.67(b) and to codify the
                payment methodology for partial episodes in Sec.  410.67(d). We
                solicited comments on our proposed approach to full and partial
                episodes, including the threshold that should be applied to determine
                when an OTP may bill for the full weekly bundle versus a partial
                episode. We also solicited comment on the minimum threshold that should
                be applied to determine when a partial episode could be billed (for
                example, at least one item or service, or an alternative threshold such
                as 10 or 25 percent of the items and services included in the OUD
                treatment services identified in the patient's current treatment plan
                (including any changes noted in the patient's medical record) over the
                course of a week). We also solicited comment regarding whether any
                other payers of OTP services allow for billing of partial bundles and
                what thresholds they use.
                    We received public comments on our proposal to create separate
                coding and payment for partial episodes. The following is a summary of
                the comments we received and our responses.
                    Comment: Many commenters noted that determining the threshold for
                when to bill the partial episode versus the full episode was
                impractical, stating it would be cumbersome to implement and would
                require far more frequent updating of the treatment plan than is
                typical, especially since the frequency of services delivered can vary
                significantly from week to week. Commenters also requested
                clarification on how various services would count toward the 51 percent
                threshold, and urged CMS to eliminate the partial bundled payment to
                simplify billing and reduce confusion that could lead to billing
                compliance issues. A few commenters stated that the total number of
                services associated with a patient's treatment plan is not documented
                in a way that would facilitate using the proposed threshold for billing
                for a full bundle, and therefore, it would not be feasible for OTPs to
                operationalize the proposed approach. Some commenters also noted that
                operationalizing this approach would require them to obtain additional
                administrative resources to track the services provided to each patient
                in relation to their treatment plan in order to determine when the
                threshold for billing for a full bundle is met. A few commenters stated
                that applying partial episodes to the TRICARE bundled rate is
                inconsistent with TRICARE's approach, which already accounts for
                differences in treatment intensity in a single unified payment rate.
                Others recommended that
                [[Page 62642]]
                CMS should not apply partial week payments, as the reduced resource
                costs for some episodes are already reflected in the payment rate for
                the full week bundle. A few commenters supported the concept of partial
                episodes, but requested clarification about the billing threshold.
                    Response: Based on the concerns raised by the commenters, we are
                not finalizing partial episodes at this time. We understand that many
                OTPs would need to change their documentation patterns to
                operationalize the proposed threshold for determining when to bill a
                full episode versus a partial episode and that having to make such
                changes in a short amount of time could be burdensome and potentially
                create barriers to providing care. In the interest of combating the
                opioid crisis and in the best interest of beneficiaries, our goal is to
                minimize barriers to OTPs enrolling in Medicare and beginning to
                furnish services to Medicare beneficiaries. Accordingly, for CY 2020,
                we are finalizing only the proposal to establish full weekly bundled
                payments at Sec.  410.67(d)(2). The threshold to bill a full episode
                will be that at least one service was furnished (from either the drug
                or non-drug component) to the patient during the week that corresponds
                to the episode of care. We are finalizing this threshold at Sec.
                410.67(d)(3). We note that we will be monitoring for abuse given this
                lower threshold for billing for full weekly bundled payment. We also
                note that we remain interested in implementing a payment policy for
                partial episodes at some point in the future. We would establish the
                policies to govern partial episodes through notice and comment
                rulemaking, and we are interested in working with OTPs to explore how
                such a policy would best be applied.
                (c) Non-Drug Episode of Care
                    In addition to the bundled payments for full and partial episodes
                of care that are based on the medication administered for treatment
                (and include both a drug and non-drug component as described in detail
                below), we proposed to establish a non-drug episode of care to provide
                a mechanism for OTPs to bill for non-drug services, including substance
                use counseling, individual and group therapy, and toxicology testing
                that are rendered during weeks when a medication is not administered,
                for example, in cases where a patient is being treated with injectable
                buprenorphine or naltrexone on a monthly basis or has a buprenorphine
                implant. We proposed to codify this non-drug episode of care at Sec.
                410.67(d).
                    We did not receive any comments on non-drug episodes of care, and
                are finalizing the policies governing the use of non-drug episodes of
                care in Sec.  410.67(d)(1)(iii).
                (2) Drug and Non-Drug Components
                    As discussed above, in establishing the bundled payment rates, we
                proposed to develop separate payment methodologies for the drug
                component and the non-drug (which includes the dispensing and
                administration of such medication, if applicable; substance use
                counseling; individual and group therapy; and toxicology testing)
                components of the bundled payment. Each of these components is
                discussed in this section.
                (a) Drug Component
                    As discussed previously, the cost of medications used by OTPs to
                treat OUD varies widely. Creating a single bundled payment rate that
                does not reflect the type of drug used could result in access issues
                for beneficiaries who might be best served by treatment using a more
                expensive medication. As a result, in the proposed rule (84 FR 40526),
                we stated our belief that the significant variation in the cost of
                these drugs would need to be reflected adequately in the bundled
                payment rates for OTP services to avoid impairing access to appropriate
                care.
                    Section 1834(w)(2) of the Act states that the Secretary may
                implement the bundled payment to OTPs though one or more bundles based
                on a number of factors, including the type of medication provided (such
                as buprenorphine, methadone, extended-release injectable naltrexone, or
                a new innovative drug). Accordingly, consistent with the discretion
                afforded under section 1834(w)(2) of the Act, and after consideration
                of payment rates paid to OTPs for comparable services by other payers
                as discussed above, we proposed to base the OTP bundled payment rates,
                in part, on the type of medication used for treatment. Specifically, we
                proposed the following categories of bundled payments to reflect those
                drugs currently approved by the FDA under section 505 of the FFDCA for
                use in treatment of OUD:
                     Methadone (oral).
                     Buprenorphine (oral).
                     Buprenorphine (injection).
                     Buprenorphine (implant).
                     Naltrexone (injection).
                    In addition, we proposed to create a category of bundled payment
                describing a drug not otherwise specified to be used for new drugs (as
                discussed further below). We also proposed a non-drug bundled payment
                to be used when medication is not administered (as discussed further
                below) noting that we believe creating these categories of bundled
                payments based on the drug used for treatment would strike a reasonable
                balance between recognizing the variable costs of these medications and
                the statutory requirement to make a bundled payment for OTP services.
                We proposed to codify this policy of establishing the categories of
                bundled payments based on the type of opioid agonist and antagonist
                treatment medication in Sec.  410.67(d)(1).
                    We received public comments related to our proposal to establish
                categories of OTP bundled payments based on the type of opioid agonist
                and antagonist treatment medication used during the episode of care.
                The following is a summary of the comments we received and our
                responses.
                    Comment: Several commenters submitted comments concerning our
                proposal to base the OTP bundled payment rates, in part, on the type of
                medication (that is, methadone (oral), buprenorphine (oral),
                buprenorphine (injection), buprenorphine (implant), naltrexone
                (injection)) used for treatment. A few commenters supported our
                proposal to use the five medication categories. Another commenter
                supported the medication categories but cautioned CMS to monitor and
                evaluate drug pricing and availability to ensure the payments are
                sufficient to cover the cost of medications. In contrast, another
                commenter stated that the medications should not be bundled and that
                the bundles, if used, were too broad. This commenter believed such an
                approach would inhibit the ability of the health care provider to
                choose the best treatment for a patient.
                    Response: Section 1861(jjj)(1) of the Act defines OUD treatment
                services to include certain opioid treatment medications furnished by
                an OTP. Section 1834(w) of the Act instructs the Secretary to make a
                bundled payment for these services. We do not believe the statute
                supports unbundling the medications from the other OUD treatment
                services furnished by OTPs. We defined the five medication categories
                to represent the distinct types of covered OTP medications currently on
                the market based on primary active ingredient, method of
                administration, and cost. We believe these categories of bundled
                payments strike a reasonable balance between recognizing the variable
                costs of these medications and the statutory requirement to make a
                bundled payment for OTP services. We discuss our treatment of new drugs
                below.
                [[Page 62643]]
                    Comment: One commenter urged CMS to clarify whether the naltrexone
                bundled payment category referred to injectable or oral naltrexone.
                    Response: The naltrexone drug product that is FDA-approved for the
                treatment of opioid dependence is an extended-release, intramuscular
                injection.\54\ The naltrexone bundled payment category refers to this
                injectable product.
                ---------------------------------------------------------------------------
                    \54\ https://www.fda.gov/drugs/drugsafety/informationbydrugclass/ucm600092.htm.
                ---------------------------------------------------------------------------
                    Comment: A commenter brought to our attention the fact that
                buprenorphine-only products are both FDA-approved and marketed for the
                treatment of opioid dependence by generic manufacturers, whereas in the
                proposed rule, we stated our understanding that all oral buprenorphine
                products also contained naloxone as an active ingredient. The commenter
                recommended that we clarify the definition of buprenorphine products to
                note the inclusion of these products as well.
                    Response: Upon further inspection, we have identified marketed
                buprenorphine-only products. We have also reviewed the available
                pricing for both the buprenorphine-only and the buprenorphine with
                naloxone products and found them to be similar. We believe that
                including both types of products in the same drug category for payment
                purposes would not negatively impact patient access to either of these
                two versions of buprenorphine. Therefore, we are clarifying that the
                proposed ``Buprenorphine (oral)'' drug category includes both the
                buprenorphine-only and buprenorphine-naloxone products that are
                currently FDA-approved and marketed for the treatment of opioid
                dependence.
                    After consideration of the public comments, we are finalizing our
                proposal to base the OTP bundled payment rates, in part, on the type of
                medication used for treatment. These categories reflect those drugs
                currently approved by the FDA under section 505 of the FFDCA for use in
                treatment of OUD: that is, methadone (oral), buprenorphine (oral),
                buprenorphine (injection), buprenorphine (implant), naltrexone
                (injection)). We will codify this policy of establishing the categories
                of bundled payments based on the type of opioid agonist and antagonist
                treatment medication in Sec.  410.67(d)(1).
                i. New Drugs
                    We anticipate that there may be new FDA-approved opioid agonist and
                antagonist treatment medications to treat OUD in the future. In the
                scenario where an OTP furnishes MAT using a new FDA-approved opioid
                agonist or antagonist medication for OUD treatment that is not
                specified in one of our existing codes, we proposed that OTPs would
                bill for the episode of care using the medication not otherwise
                specified (NOS) code (HCPCS code G2075). In such cases, we proposed to
                use the typical or average maintenance dose to determine the drug cost
                for the new bundle. We also proposed that pricing would be determined
                based on the relevant pricing methodology (described in section II.G.3.
                of this final rule) or invoice pricing in the event the information
                necessary to apply the relevant pricing methodology is not available.
                For example, in the case of injectable and implantable drugs, which are
                generally covered and paid for under Medicare Part B, we proposed to
                use the methodology in section 1847A of the Act (which bases most
                payments on ASP). For oral medications, which are generally covered and
                paid for under Medicare Part D, we proposed to use ASP-based payment
                when we receive manufacturer-submitted ASP data for these drugs. In the
                event that we do not receive manufacturer-submitted ASP pricing data,
                we considered several potential pricing mechanisms (discussed further
                below) to estimate the payment amounts for oral drugs typically paid
                for under Medicare Part D but that would become OTP drugs paid under
                Part B when used as part of MAT furnished in an OTP. We did not propose
                a specific pricing mechanism for the situation in which we do not
                receive manufacturer-submitted ASP pricing data, but solicited public
                comment on several potential approaches for estimating the acquisition
                cost and payment amounts for these drugs. If the information necessary
                to apply the alternative pricing methodology chosen for the oral drugs
                is also not available to price the new medication, we proposed to use
                invoice pricing until either ASP pricing data or the information
                necessary to apply the chosen alternate pricing methodology becomes
                available to price the medication. We proposed to codify this approach
                for determining the amount of the bundled payment for new medications
                in Sec.  410.67(d)(2). The medication NOS code would be used until we
                have the opportunity to consider through rulemaking establishing a
                unique bundled payment for episodes of care during which the new drug
                is furnished. We solicited comments on this proposed approach to the
                treatment of new drugs used for MAT in OTPs.
                    We received public comments on the proposals related to new drugs.
                The following is a summary of the comments we received and our
                responses.
                    Comment: A few commenters generally supported coverage of new FDA-
                approved medications for OUD. One commenter noted that a flexible
                approach to innovative therapies to treat OUD is critical to ensure
                that Medicare beneficiaries have access to all FDA-approved therapies
                that best meet their needs.
                    Response: We believe that our proposal to allow providers to bill
                using a medication NOS code would offer OTPs the flexibility to provide
                beneficiaries with quick access to new FDA-approved medications for OUD
                until we have the opportunity to consider through rulemaking
                establishing a unique bundled payment for episodes of care during which
                the new drug is furnished.
                    Therefore, we are finalizing our proposal to allow OTPs to bill for
                an episode of care using the medication not otherwise specified (NOS)
                code (HCPCS code G2075) in the scenario where an OTP furnishes MAT
                using a new FDA-approved opioid agonist or antagonist medication for
                OUD treatment that is not specified in one of our existing codes. In
                such cases, the typical or average maintenance dose would be used to
                determine the drug cost for the new bundle, which contractors would
                then add to the non-drug component payment amount that corresponds with
                the relevant payment for drug administration (oral, injectable, or
                implantable) to determine the total bundled payment for the episode of
                care. We are also finalizing our proposal that pricing would be
                determined based on the relevant pricing methodology as described in
                section II.G.3. of this final rule or through invoice pricing in the
                event the information necessary to apply the relevant pricing
                methodology is not available. We are codifying this approach for
                determining the amount of the bundled payment for episodes of care with
                new medications in Sec.  410.67(d)(2)(i)(C).
                    As discussed above, we also solicited comments on how new
                medications that may be approved by the FDA in the future for use in
                the treatment of OUD with a novel mechanism of action (for example, not
                an opioid agonist and/or antagonist), such as medications approved
                under section 505 of the FFDCA to treat OUD and biological products
                licensed under section 351 of the Public Health Service Act to treat
                OUD, should be considered in the
                [[Page 62644]]
                context of OUD treatment services provided by OTPs. Additionally, we
                solicited comments on how such new drugs with a novel mechanism of
                action should be priced, and specifically whether pricing for these new
                non-opioid agonist and/or antagonist medications should be determined
                using the same pricing methodology proposed for new opioid agonist and
                antagonist treatment medications, described above or whether an
                alternative pricing methodology should be used.
                    We did not receive any comments on the pricing of new drugs with a
                novel mechanism of action. We intend to monitor for the development of
                such new drugs for the treatment of OUD, and may consider this topic
                further in future rulemaking.
                (b) Non-Drug Component
                i. Counseling, Therapy, Toxicology Testing, and Drug Administration
                    As discussed above, the bundled payment is for OUD treatment
                services furnished during the episode of care, which we proposed to
                define as the FDA-approved opioid agonist and antagonist treatment
                medications, the dispensing and administration of such medications (if
                applicable), substance use counseling by a professional to the extent
                authorized under state law to furnish such services, individual and
                group therapy with a physician or psychologist (or other mental health
                professional to the extent authorized under state law), and toxicology
                testing. The non-drug component of the OUD treatment services includes
                all items and services furnished during an episode of care except for
                the medication.
                    Under the SAMHSA certification standards at Sec.  8.12(f)(5), OTPs
                must provide adequate substance abuse counseling to each patient as
                clinically necessary. We note that section 1861(jjj)(1)(C) of the Act,
                as added by section 2005(b) of the SUPPORT Act defines OUD treatment
                services as including ``substance use counseling by a professional to
                the extent authorized under state law to furnish such services.''
                Therefore, professionals furnishing therapy or counseling services for
                OUD treatment must be operating within state law and scope of practice.
                These professionals could include licensed professional counselors,
                licensed clinical alcohol and drug counselors, and certified peer
                specialists that are permitted to furnish this type of therapy or
                counseling by state law and scope of practice. To the extent that the
                individuals furnishing therapy or counseling services are not
                authorized under state law to furnish such services, the therapy or
                counseling services would not be covered as OUD treatment services.
                    Additionally, under the SAMHSA certification standards at Sec.
                8.12(f)(6), OTPs are required to provide adequate testing or analysis
                for drugs of abuse, including at least eight random drug abuse tests
                per year, per patient in maintenance treatment, in accordance with
                generally accepted clinical practice. These drug abuse tests (which are
                identified as toxicology tests in the definition of OUD treatment
                services in section 1861(jjj)(1)(E) of the Act) are used for
                diagnosing, monitoring and evaluating progress in treatment. The
                testing typically includes tests for opioids and other controlled
                substances. Urinalysis is primarily used for this testing; however,
                there are other types of testing such as hair or fluid analysis that
                could be used. We note that any of these types of toxicology tests
                would be considered to be OUD treatment services and would be included
                in the bundled payment for services furnished by an OTP.
                    The non-drug component of the bundle also includes the cost of drug
                dispensing and/or administration, as applicable. Additional details
                regarding our proposed approach for pricing this aspect of the non-drug
                component of the bundle are included in our discussion of payment rates
                later in this section. We did not receive comments on our proposal to
                include counseling, therapy, toxicology testing, and drug
                administration in the non-drug component of the bundle.
                ii. Other Services
                    As discussed in the CY 2020 PFS proposed rule, we proposed to
                define OUD treatment services as those items and services that are
                specifically enumerated in section 1861(jjj)(1) of the Act, including
                services that are furnished via telecommunications technology, and
                solicited comment on any other items and services we might consider
                including as OUD treatment services under the discretion given to the
                Secretary in subparagraph (F) of that section to determine other
                appropriate items and services. We noted that if we were to finalize a
                definition of OUD treatment services that includes any other items or
                services, such as intake activities or periodic assessments as
                discussed above, we would consider whether any changes to the payment
                rates for the bundled payments would be necessary. As discussed above,
                we received comments that were supportive of creating add-on payment
                adjustments for intake activities and periodic assessments, and we are
                finalizing including intake activities and periodic assessment in the
                definition of OUD treatment services.
                (3) Adjustment to Bundled Payment Rate for Additional Counseling or
                Therapy Services
                    In addition to the items and services that we proposed to include
                in the bundles, we recognized that counseling and therapy are important
                components of MAT and that patients may need to receive counseling and/
                or therapy more frequently at certain points in their treatment. In
                developing our policies for the proposed rule, we sought to ensure that
                patients have access to these needed services. Accordingly, we proposed
                to adjust the bundled payment rates through the use of an add-on code
                in order 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. As noted
                previously, we understand that there is variability in the frequency of
                services a patient might receive in a given week depending on the
                patient's severity and stage of treatment; however, in the proposed
                rule, we assumed that a typical case might include one substance use
                counseling session, one individual therapy session, and one group
                therapy session per week. As we explained in the proposed rule, we
                understand that the frequency of services will vary among patients and
                will change over time based on the individual patient's needs. We
                expect that the patient's treatment plan or the medical record will be
                updated to reflect when there are changes in the expected frequency of
                medically-necessary services based on the patient's condition and
                following such an update, the add-on code should no longer be billed if
                the frequency of the patient's counseling and/or therapy services is
                consistent with the treatment plan or medical record. In the case of
                unexpected or unforeseen circumstances that are time-limited, resolve
                quickly, and do not lead to updates to the treatment plan, we explained
                that we expect the medical necessity for billing the add-on code would
                be documented in the medical record. The proposed add-on code would
                reflect each additional 30 minutes of counseling or group or individual
                therapy furnished in a week of MAT, and could be billed in conjunction
                with the codes describing the full episode of care. For example,
                [[Page 62645]]
                there may be some weeks when a patient has a relapse or unexpected
                psychosocial stressors arise that warrant additional reasonable and
                necessary counseling services that were not foreseen at the time that
                the treatment plan was developed. We acknowledged that an unintended
                consequence of using the treatment plan to determine when billing of
                the add-on code would be permissible is a potential incentive for OTPs
                to document minimal counseling and/or therapy needs for a beneficiary,
                thereby resulting in increased opportunity for billing the add-on code.
                We indicated that we expect OTPs will ensure that treatment plans
                reflect the full scope of services expected to be furnished during an
                episode of care and will update treatment plans regularly to reflect
                changes. We noted that we intend to monitor this issue and would
                consider making changes to this policy through future rulemaking if
                necessary to ensure that this payment adjustment is not being billed
                inappropriately. We solicited comments on the add-on code and the
                threshold for billing. We proposed to codify this adjustment to the
                bundled payment rate for additional counseling or therapy services in
                Sec.  410.67(d)(3)(i).
                    We received several comments on our proposed adjustment to the
                bundled payment rate for additional counseling or therapy services. The
                following is a summary of the comments we received and our responses.
                    Comment: Many commenters supported our proposal to create an add-on
                G-code to adjust the bundled payment rate for additional counseling or
                therapy services furnished. Several commenters stated that the number
                of therapy and counseling services described in the proposed rule
                usually only occurs during the initial stages of treatment and a few
                commenters stated that patients with that level of need in a given week
                may be referred for more intensive treatment, such as Intensive
                Outpatient (IOP) treatment. Some commenters noted the variation in
                payment rates for counseling across various state Medicaid programs and
                a few commenters suggested that we use HCPCS code G0396 as a reference
                code in valuing the payment rate for the counseling add-on code.
                    Response: After consideration of the public comments, we are
                finalizing our proposal to establish an add-on code to describe an
                adjustment to the bundled payment when additional counseling or therapy
                services are furnished. This add-on payment is codified in the
                regulations at Sec.  410.67(d)(4)(i)(A). The payment rate we are
                finalizing for this add-on payment is discussed in more detail later in
                this final rule. This add-on code may be billed when counseling or
                therapy services are furnished that substantially exceed the amount
                specified in the patient's individualized treatment plan. OTPs will be
                required to document the medical necessity for these services in the
                patient's medical record. Additionally, we note that we understand the
                frequency with which counseling and therapy services are furnished will
                vary over time for each individual patient and will often decrease over
                time as a patient stabilizes. Nevertheless, we believe it is important
                to acknowledge that some patients will require more intensive
                counseling and therapy services at certain times during their treatment
                and to establish a payment methodology under which OTPs may receive
                payment for furnishing these medically necessary services.
                (4) Site of Service (Telecommunications)
                    In recent years, we have sought to decrease barriers to access to
                care by furthering policies that expand the use of communication
                technologies. In the CY 2019 PFS final rule (83 FR 59482), we finalized
                new separate payments for communication technology-based services,
                including a virtual check-in and a remote evaluation of pre-recorded
                patient information. SAMHSA's federal guidelines (https://store.samhsa.gov/system/files/pep15-fedguideotp.pdf) for OTPs refer to
                the CMS guidance on telemedicine and also state that OTPs are advised
                to proceed with full understanding of requirements established by state
                or health professional licensing boards. SAMHSA's federal guidelines
                for OTPs state that exceptional attention needs to be paid to data
                security and privacy in this evolving field. Telemedicine services
                should, under no circumstances, expand the scope of practice of a
                healthcare professional or permit practice in a jurisdiction (the
                location of the patient) where the provider is not licensed.
                    We proposed to allow OTPs to furnish the substance use counseling,
                individual therapy, and group therapy included in the bundle via two-
                way interactive audio-video communication technology, as clinically
                appropriate, in order to increase access to care for beneficiaries. We
                believed this would be an appropriate approach because, as discussed
                previously, we expected the telehealth services that will be furnished
                by OTPs will be similar to the Medicare telehealth services furnished
                under section 1834(m) of the Act, and the use of two-way interactive
                audio-video communication technology is required for these Medicare
                telehealth services under Sec.  410.78(a)(3). By allowing use of
                communication technology in furnishing these services, OTPs in rural
                communities or federally-designated geographic health professional
                shortage areas would be able to facilitate treatment through virtual
                care coming from an urban or other external site; however, we noted
                that the physicians and other practitioners furnishing these services
                would be required to comply with all applicable requirements related to
                professional licensing and scope of practice.
                    We noted that section 1834(m) of the Act applies only to Medicare
                telehealth services furnished by a physician or other practitioner.
                Because OUD treatment services furnished by an OTP are not considered
                to be services furnished by a physician or other practitioner, we
                indicated that the restrictions of section 1834(m) of the Act would not
                apply. Additionally, we noted that counseling or therapy furnished via
                communication technology as part of OUD treatment services furnished by
                an OTP must not be separately billed by the practitioner furnishing the
                counseling or therapy because these services would already be paid
                through the bundled payment made to the OTP.
                    We proposed to include language in Sec.  410.67(b) in the
                definition of OUD treatment services to allow OTPs to use two-way
                interactive audio-video communication technology, as clinically
                appropriate, in furnishing substance use counseling and individual and
                group therapy services, respectively. We solicited comment as to
                whether the proposal, including the furnishing of these services
                through communication technology, would be clinically appropriate. We
                also solicited public comment on other components of the bundle that
                may be clinically appropriate to be furnished via communication
                technology, while considering SAMHSA's guidance that OTPs should pay
                exceptional attention to data security and privacy.
                    We received public comments on the proposal to include substance
                use counseling and individual and group therapy services furnished
                using telecommunications technology in the definition of OUD treatment
                services. The following is a summary of the comments we received and
                our responses.
                    Comment: Many commenters supported the proposal to allow OTPs to
                use two-way interactive audio-video
                [[Page 62646]]
                communication technology, as clinically appropriate, in furnishing
                substance use counseling and individual and group therapy services,
                respectively. Several commenters noted that allowing the use of
                communication technology in furnishing these services has the potential
                to vastly expand OTPs' reach, particularly in underserved areas. A few
                commenters urged CMS to afford OTPs maximum flexibility in how
                telemedicine is deployed, such as allowing the provision of such
                services regardless of whether or not the counselor or patient is
                physically located at an OTP and noted that several states already
                support less restrictive telemedicine practices. One commenter
                recommended that CMS should also allow OTPs to furnish other important
                medical services to beneficiaries via telecommunications, including:
                Medication dose assessment and interactions, basic primary care, and
                HIV and hepatitis C risk reduction. A few commenters requested
                clarification as to whether a patient participating in individual and/
                or group counseling could do so from their home or another location of
                their choosing as opposed to a designated satellite location.
                    Response: We are finalizing our proposal to allow OTPs to use two-
                way interactive audio-video communication technology, as clinically
                appropriate, in furnishing substance use counseling and individual and
                group therapy services. In response to the requests for clarification
                regarding where the beneficiary and practitioner can be located at the
                time the service is furnished, we note that section 2001 of the SUPPORT
                Act 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. Accordingly, consistent with this
                policy, we believe it is appropriate to permit beneficiaries to receive
                substance use counseling and individual group therapy services
                furnished by an OTP using telecommunications technology in their home
                or any other telehealth originating site, provided the requirements
                that apply to telehealth services payable under the PFS after July 1,
                2019, are met. In response to commenters who recommended that CMS
                should allow OTPs to furnish other medical services to beneficiaries
                via telecommunications, we note that SAMHSA and the DEA have
                regulations related to OUD services furnished via telecommunications
                that we would need further time to consider, but we may revisit this
                recommendation in developing our policies for future rulemaking.
                    After consideration of the public comments, we are finalizing our
                proposal to allow OTPs to use two-way interactive audio-video
                communication technology, as clinically appropriate, in furnishing
                substance use counseling and individual and group therapy services. We
                are also finalizing our proposal to include substance use counseling
                and individual and group therapy services furnished via two-way
                interactive audio-video communication technology in the definition of
                opioid use disorder treatment service in Sec.  410.67(b). We note that
                as OTP services are not PFS services, no originating site facility fee
                (HCPCS code Q3014) applies to OUD treatment services, and OTPs are not
                authorized to bill for the originating site facility fee.
                (5) Coding
                    We proposed to adopt a coding structure for OUD treatment services
                that would vary by the medication administered. To operationalize this
                approach, we proposed to establish G codes for weekly bundles
                describing treatment with methadone, buprenorphine oral, buprenorphine
                injectable, buprenorphine implants (insertion, removal, and insertion/
                removal), extended-release injectable naltrexone, a non-drug bundle,
                and one for a medication not otherwise specified. We also proposed to
                establish partial episode G codes to correspond with each of those
                bundles, respectively. Additionally, we proposed to create an add-on
                code to describe additional counseling that is furnished beyond the
                amount specified in the patient's treatment plan. We also noted that
                were we to finalize including intake activities and periodic
                assessments in the definition of OUD treatment services, we welcomed
                feedback on whether we should consider modifying the payment associated
                with the bundle or creating add-on codes for services such as the
                initial physical examination, initial assessments and preparation of a
                treatment plan, periodic assessments or additional toxicology testing,
                and if so, what inputs we might consider in pricing such services, such
                as payment amounts for similar services under the PFS or CLFS. For
                example, we noted that to price the initial assessment, medical
                examination, and development of a treatment plan, we could crosswalk to
                the Medicare payment rate for a level 3 evaluation and management (E/M)
                visit for a new patient and to price the periodic assessments, we could
                crosswalk to the Medicare payment rate for a level 3 E/M visit for an
                established patient. To price additional toxicology testing, we could
                crosswalk to the Medicare payment for presumptive drug testing, such as
                that described by CPT code 80305. Additionally, we welcomed feedback on
                whether we should consider creating codes to describe bundled payments
                that include only the cost of the drug and drug administration as
                applicable in order to account for beneficiaries who are receiving
                interim maintenance treatment (as described previously in this section)
                or other situations in which the beneficiary is not receiving all of
                the services described in the full bundles.
                    Regarding the non-drug bundle, we noted that this code would be
                billed for services furnished during an episode of care or partial
                episode of care when a medication is not administered. For example,
                when a patient receives a buprenorphine injection on a monthly basis,
                the OTP will only require payment for the medication during the first
                week of the month when the injection is given, and therefore, would
                bill the code describing the bundle that includes injectable
                buprenorphine during the first week of the month and would bill the
                code describing the non-drug bundle for the remaining weeks in that
                month for services such as substance use counseling, individual and
                group therapy, and toxicology testing.
                    As discussed previously, we proposed that the codes describing the
                bundled payment for an episode of care or partial episode of care with
                a medication not otherwise specified should be used when the OTP
                furnishes MAT with a new opioid agonist or antagonist treatment
                medication approved by the FDA under section 505 of the FFDCA for the
                treatment of OUD. OTPs would use these codes until we have the
                opportunity to propose and finalize a new G code to describe the
                bundled payment for treatment using that drug and price it accordingly
                in the next rulemaking cycle. We noted that the code describing the
                weekly bundle for a medication not otherwise specified should not be
                used when the drug being administered is not a new opioid agonist or
                antagonist treatment medication approved by the FDA under section 505
                of the FFDCA for the treatment of OUD, and therefore, for which
                Medicare would not have the authority to make payment since section
                1861(jjj)(1)(A) of the Act requires that the medication must be an
                opioid agonist or antagonist treatment medication approved by the FDA
                under section 505 of the FFDCA for the treatment of OUD. Given the
                program integrity concerns regarding the
                [[Page 62647]]
                potential for misuse of a medication not otherwise specified code, we
                also welcomed comments as to whether this code was needed.
                    See Table 18 for a list of the HCPCS codes for the weekly bundles
                that we are finalizing (G2067-G2075). We proposed that only an entity
                enrolled with Medicare as an OTP could bill these codes. Additionally,
                we proposed that OTPs would be limited to billing only these codes
                describing bundled payments, and may not bill for other codes, such as
                those paid under the PFS.
                    We received many comments related to coding and payment for OTP
                services. The following is a summary of the comments we received and
                our responses.
                    Comment: As described previously, many commenters supported the
                inclusion of intake activities, such as the initial physician
                examination, initial assessment and preparation of a treatment plan, as
                well as periodic assessments in the definition of OUD treatment
                services. Many commenters suggested that we create add-on codes to
                describe these services, and several commenters specifically suggested
                that we use CPT codes 99204 and 99214 as reference codes for pricing
                the intake and periodic assessment add-ons, respectively. A few
                commenters recommended that CMS work with OTPs and/or SAMHSA to
                determine whether an add-on for periodic assessments would sufficiently
                cover the needs of pregnant and postpartum women who seek care at OTPs.
                    Response: As discussed above, we are finalizing including intake
                activities and periodic assessment in the definition of OUD treatment
                services. It is our understanding that these services are furnished
                much less frequently than the other services included in the weekly
                bundled payments; therefore, we are creating add-on G-codes to describe
                these services, which will allow us to make more targeted payments for
                these services. We note that the add-on code describing intake
                activities should only be billed for new patients (that is, patients
                starting treatment at the OTP). We agree with the commenters that the
                level 4 office/outpatient E/M visits are a good approximation of the
                services provided at intake and during periodic assessments at OTPs
                based on the expected acuity of patients with OUD receiving services at
                OTPs, who are likely to have multiple co-morbidities and present with
                problems that are of moderate to high severity and require medical
                decision making of moderate complexity. Therefore, we are pricing the
                add-on code describing intake activities using CPT code 99204 (Office
                or other outpatient visit for the evaluation and management of a new
                patient, which requires these 3 key components: A comprehensive
                history; A comprehensive 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 of
                moderate to high severity. Typically, 45 minutes are spent face-to-face
                with the patient and/or family) as a reference code, which is assigned
                a CY 2019 non-facility rate of $166.86 under the PFS in addition to
                accounting for one toxicology test furnished at intake, using CPT code
                80305 (Drug test(s), presumptive, any number of drug classes, any
                number of devices or procedures; capable of being read by direct
                optical observation only (e.g., utilizing immunoassay [e.g., dipsticks,
                cups, cards, or cartridges]), includes sample validation when
                performed, per date of service) as a reference code, which is assigned
                a rate of $12.60 under the CLFS in CY 2019. Therefore, we summed those
                two amounts to calculate the total payment rate for the add-on code
                describing intake activities, which is $179.46. Similarly, we are
                pricing the add-on code describing periodic assessments using CPT code
                99214 (Office or other outpatient visit for the evaluation and
                management of an established patient, which requires at least 2 of
                these 3 key components: A detailed 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 of moderate to high severity. Typically, 25
                minutes are spent face-to-face with the patient and/or family) as a
                reference code, which is assigned a CY 2019 non-facility rate of
                $110.28 under the PFS. The medical services described by these add-on
                codes could be furnished by a program physician, a primary care
                physician or an authorized healthcare professional under the
                supervision of a program physician or qualified personnel such as nurse
                practitioners and physician assistants. The other assessments,
                including psychosocial assessments could be furnished by practitioners
                who are eligible to do so under their state law and scope of licensure.
                Additionally, we note that the add-on code describing periodic
                assessments could be billed for each periodic assessment performed for
                patients that require multiple assessments during an episode of care,
                such as patients who are pregnant or postpartum. We note that in order
                to bill for the add-on code, the services would need to be medically
                reasonable and necessary and that OTPs should document the rationale
                for billing the add-on code in the patient's medical record. We also
                plan to monitor utilization of the periodic assessment add-on code
                given program integrity concerns about overutilization, and may
                consider further refinements in future rulemaking.
                    Comment: Several commenters supported the creation of add-on codes
                to account for more frequent presumptive testing, including presumptive
                testing using instrumented chemistry analyzers, and for definitive
                testing. Several commenters highlighted the differences between
                presumptive and definitive tests, stating that CPT code 80305 describes
                a presumptive screen test by Dipstick or Point of Care rapid test cup,
                and noted that there is a significant difference in the payment rate
                for this code compared to the codes describing definitive drug testing.
                Several commenters requested that CMS set a rate that encompasses
                medically-appropriate testing frequencies, but also addresses the
                complexity of testing, noting that that the presumptive screening test
                uses limited technology and should not be relied upon by clinicians for
                providing true actionable and reliable information and stated that a
                bundled rate that includes only a crosswalk to a point-of-care rapid
                test will severely impact patient care. A few commenters noted that
                most basic drug tests will not detect Fentanyl and that failure to
                properly identify Fentanyl may place patients' lives at risk, and
                therefore, recommended that CMS consider referencing the current CLFS
                rates for codes HCPCS codes G0480-G0483, which describe definitive drug
                testing. A few commenters noted that point of care immunoassay testing
                is rarely able to detect methadone or buprenorphine and can never
                detect naltrexone and, if methadone or buprenorphine is detected, the
                immunoassay is unable to determine whether the patient is compliant or
                is adulterating the urine sample. In contrast, definitive testing is
                appropriate for detecting all of the drugs used for MAT therapy.
                    Response: We find the commenters' arguments that both higher level
                presumptive tests and definitive tests
                [[Page 62648]]
                can be clinically appropriate in the treatment of OUD to be compelling.
                Further, we want to avoid creating financial disincentives that would
                prevent OTPs from furnishing medically-necessary care. Accordingly, we
                are building into the bundled payments both presumptive and definitive
                testing. We understand from commenters that while SAMHSA requires at
                least 8 toxicology screenings per year per patient, toxicology
                screening is frequently done more often, including up to weekly in new
                patients and that this is most frequently presumptive testing, but in
                more rare circumstances definitive testing is also performed. Thus, in
                consideration of what we believe might be an average case, we are
                assuming that beneficiaries will receive an average of two presumptive
                tests and one definitive test per month.
                    We priced the presumptive test based on the CLFS rate for CPT code
                80305, which is $12.60, and then prorated that amount by dividing that
                rate by 2 to reflect the presumption that this type of testing would be
                furnished only twice a month. We priced the definitive test based on
                the CLFS rate for HCPCS code G0480, which is $114.43 and then prorated
                that amount by dividing that rate by 4 to reflect our presumption that
                this type of testing would be furnished once a month. Additionally, we
                note that we interpret the statute to require that all toxicology
                testing furnished by the OTP must be included in the bundled payment or
                adjustments to the bundled payment and could not be billed separately
                under the CLFS. We have elected to build the payment for these tests
                into the weekly bundled rates, rather than creating add-on codes, in
                order to avoid creating an incentive to furnish testing more frequently
                than needed. However, as OTPs begin to bill Medicare, if we find that
                there is an issue with beneficiaries receiving access to medically-
                necessary definitive testing, we may consider making changes to how
                these tests are paid through future rulemaking.
                    Comment: Several commenters stated that OTPs often provide case
                management and/or care management services and requested that CMS
                consider reimbursing for these services either as part of the standard
                bundle or as an adjustment to the bundled payment, as applicable. A few
                commenters stated that OTPs serve as a fixed point of responsibility in
                the provision of whole person-centered care and improving health
                outcomes through collaborative arrangements with health care providers
                outside of the OTP and that the goal of care management is to reduce
                health care costs, specifically preventable hospital admissions,
                readmissions, and avoidable emergency room visits. The commenters also
                stated that OTP staff also help patients with accessing food benefits,
                housing, and employment searches, which are critical components for
                sustained recovery, as part of case management.
                    Response: We appreciate the feedback and note that we would like to
                work with OTPs to better understand how these services are furnished in
                the OTP setting and, as noted previously, we are interested in
                continued feedback and data on the specific items and services,
                including their frequency, furnished to beneficiaries by an OTP. We may
                consider making payment for case management/care management activities
                in future rulemaking.
                    We note that the definition of OUD treatment services described in
                this final rule would need to be revised in future rulemaking to
                include any such additional items and services.
                    Comment: A few commenters requested that CMS clarify whether the
                proposed billing codes could be used when a patient is undergoing
                detoxification in an OTP and some commenters requested a separate code
                describing a bundled payment for the costs associated with medications
                for medically-supervised management of opioid withdrawal, as well as
                counseling and toxicology testing. One commenter requested guidance to
                clarify how OTPs could bill for a ``naloxone challenge test'' prior to
                initiation of treatment with Vivitrol (naltrexone for extended-release
                injectable suspension).
                    Response: We note that there is no specified dosage required for
                billing the bundled payments, so if a patient is tapering off methadone
                or buprenorphine while undergoing detoxification, the bundled payments
                describing those drugs may be used if the requirements for billing are
                satisfied and the non-drug bundle could be billed during any time that
                the patient is not being dispensed or administered a covered OUD
                treatment medication. We may consider for future rulemaking whether
                additional coding or payment changes are needed with respect to
                detoxification or the provision of naloxone.
                    Comment: Several commenters requested clarification related to how
                take-home dosages of medication should be billed. A few commenters
                noted that the proposed definition of a partial episode does not
                account for patients who have earned take-home dose privileges and as a
                result may only attend the OTP once or twice in a month.
                    Response: We agree with the commenters that additional coding is
                required to accurately account for the costs associated with providing
                a patient with take-home doses of medication. Accordingly, we are
                finalizing two codes to describe adjustments to the bundled payments,
                one for take-home supplies of methadone, which describes up to 7
                additional days of medication, and can be billed along with the
                respective weekly bundled payment in units of up to 3 (for a total of
                up to a one month supply), and one for take-home supplies of oral
                buprenorphine, which also describes up to 7 additional days of
                medication and can be billed along with the base bundle in units of up
                to 3 (for a total of up to a 1 month supply). We note that SAMHSA
                allows a maximum take-home supply of one month of medication;
                therefore, we do not expect the add-on codes describing take-home doses
                of methadone and oral buprenorphine to be billed any more than 3 times
                in one month (in addition to the weekly bundled payment). We also note
                that the add-on code for take-home doses of methadone can only be used
                with the methadone weekly episode of care code (HCPCS code G2067).
                Similarly, the add-on code for take-home doses of oral buprenorphine
                can only be used with the oral buprenorphine weekly episode of care
                code (HCPCS code G2068). We are pricing the add-on code describing
                take-home supplies of methadone, HCPCS code G2078, based on the payment
                rate for the drug component for the weekly bundle describing treatment
                with methadone ($35.28) and we are pricing the add-on code describing
                take home supplies of buprenorphine, HCPCS code G2079, based on the
                payment rate for the drug component for the weekly bundle describing
                treatment with oral buprenorphine ($86.26).
                    Comment: Several commenters requested clarification related to how
                the bundled payment codes should be billed in a variety of situations.
                A few commenters specifically requested clarification on how ``guest
                dosing'' should be billed and others inquired as to whether prior
                authorization would be required.
                    Response: In response to comments seeking clarification about the
                threshold to bill the partial vs. the full episodes, as noted above, we
                are finalizing only full episodes at this time and will consider
                partial episodes for future rulemaking. Additionally, as noted above,
                we are finalizing a number of add-on G codes to describe adjustments
                [[Page 62649]]
                to the bundle. Specifically, we are creating add-on codes for intake
                activities, periodic assessments, take-home supplies of methadone, take
                home supplies of oral buprenorphine, and additional counseling
                furnished. We note that some of the bundled payment codes describe a
                drug that is typically only administered once per month, such as the
                injectable drugs, or once in a 6-month period, in the case of the
                buprenorphine implants. In those cases, the code describing the bundled
                payment that includes the cost of the drug would be billed during the
                week that the drug is administered, and if at least once service is
                furnished in a subsequent week, the non-drug bundle would be billed.
                For example, in the case of a patient receiving injectable
                buprenorphine, we would expect that HCPCS code G2069 would be billed
                for the week during which the injection was administered and that HCPCS
                code G2074, which describes a bundle not including the drug, would be
                billed during any subsequent weeks that at least one non-drug service
                is furnished until the injection is administered again, at which time
                HCPCS code G2069 would be billed again for that week. We note that as
                HCPCS codes G2067-G2075 cover episodes of care of 7 contiguous days, we
                will not permit an OTP to bill any of these codes for the same
                beneficiary more than once per 7 contiguous day period. Additionally,
                consistent with FDA labelling, we do not generally expect the codes
                describing bundled payments including the injectable drugs (HCPCS codes
                G2069 and G2073) to be furnished more than once every 4 weeks.
                Similarly, consistent with FDA labelling, we do not generally expect
                the codes describing bundled payments including insertion of the
                buprenorphine implants (HCPCS codes G2070 and G2072) to be furnished
                more than once every 6 months.
                    However, we do understand there are limited clinical scenarios when
                a beneficiary may be appropriately furnished OUD treatment services at
                more than one OTP within a 7 contiguous day period, such as for guest
                dosing or when a beneficiary transfers care between OTPs. We note that
                in these limited circumstances, each of the involved OTPs may bill the
                appropriate HCPCS codes that reflect the services furnished to the
                beneficiary. We expect that both OTPs involved would provide sufficient
                documentation in the patient's medical record to reflect the clinical
                situation and services provided. We will be monitoring the claims data
                to ensure that this flexibility is not being abused. Additionally, in
                instances in which a patient is switching from one drug to another, the
                OTP should only bill for one code describing a weekly bundled payment
                for that week and should determine which code to bill based on which
                drug was furnished for the majority of the week. In response to
                commenters who requested clarification regarding prior authorization,
                we note that we did not propose, and are not finalizing any prior
                authorization requirements for services furnished in OTPs, as our goal
                is not to restrict access to necessary care.
                    The codes and long descriptors for the OTP bundled services and
                add-on services we are finalizing are:
                     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).
                     HCPCS code G2068: Medication assisted treatment,
                buprenorphine (oral); 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).
                     HCPCS code G2069: Medication assisted treatment,
                buprenorphine (injectable); 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).
                     HCPCS code G2070: Medication assisted treatment,
                buprenorphine (implant insertion); 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).
                     HCPCS code G2071: Medication assisted treatment,
                buprenorphine (implant removal); 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).
                     HCPCS code G2072: Medication assisted treatment,
                buprenorphine (implant insertion and removal); 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).
                     HCPCS code G2073: Medication assisted treatment,
                naltrexone; 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).
                     HCPCS code G2074: Medication assisted treatment, weekly
                bundle not including the drug, including substance use counseling,
                individual and group therapy, and toxicology testing if performed
                (provision of the services by a Medicare-enrolled Opioid Treatment
                Program).
                     HCPCS code G2075: Medication assisted treatment,
                medication not otherwise specified; 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).
                     HCPCS code G2076: Intake activities, including initial
                medical examination that is a complete, fully documented physical
                evaluation and initial assessment conducted by a program physician or a
                primary care physician, or an authorized healthcare professional under
                the supervision of a program physician or qualified personnel that
                includes preparation of a treatment plan that includes the patient's
                short-term goals and the tasks the patient must perform to complete the
                short-term goals; the patient's requirements for education, vocational
                rehabilitation, and employment; and the medical, psycho-social,
                economic, legal, or other supportive services that a patient needs,
                conducted by qualified personnel (provision of the services by a
                Medicare-enrolled Opioid Treatment Program); List separately in
                addition to code for primary procedure.
                     HCPCS code G2077: Periodic assessment; assessing
                periodically by qualified personnel to determine the most appropriate
                combination of services and treatment (provision of the services by a
                Medicare-enrolled Opioid Treatment Program); List separately in
                addition to code for primary procedure.
                     HCPCS code G2078: Take-home supply of methadone; up to 7
                additional day supply (provision of the services by a Medicare-enrolled
                Opioid Treatment
                [[Page 62650]]
                Program); List separately in addition to code for primary procedure.
                     HCPCS code G2079: Take-home supply of buprenorphine
                (oral); 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.
                     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.
                    Finally, we proposed that only an entity enrolled with Medicare as
                an OTP could bill these codes. Additionally, we proposed that OTPs
                would be limited to billing only these codes describing bundled
                payments, and may not bill for other codes, such as those paid under
                the PFS. We did not receive comments on these proposals, and are
                finalizing both these proposals.
                (6) Payment Rates
                    We proposed that the codes describing the OTP bundled services
                (HCPCS codes G2067-G2075) would be assigned flat dollar payment
                amounts, as listed in Table 18. As discussed previously, section 2005
                of the SUPPORT Act amended the definition of ``medical and other health
                services'' in section 1861(s) of the Act to provide for coverage of OUD
                treatment services furnished by an OTP and also added a new section
                1834(w) to the Act and amended section 1833(a)(1) of the Act to
                establish a bundled payment to OTPs for OUD treatment services
                furnished during an episode of care beginning on or after January 1,
                2020. Therefore, OUD treatment services and the payments for such
                services are wholly separate from physicians' services, as defined
                under section 1848(j)(3) of the Act, and for which payment is made
                under section 1848 of the Act. Because OUD treatment services are not
                considered physicians' services and are paid outside the PFS, we
                indicated that they would not be priced using relative value units
                (RVUs).
                    Consistent with section 1834(w) of the Act, which requires the
                Secretary to make a bundled payment for OUD treatment services
                furnished by OTPs, we proposed to build the payment rates for OUD
                treatment services by combining the cost of the drug and the non-drug
                components (as applicable) into a single bundled payment as described
                in more detail below.
                (a) Drug Component
                    As part of determining a payment rate for the proposed bundles for
                OUD treatment services, a dosage of the applicable medication must be
                selected in order to calculate the costs of the drug component of the
                bundle. We proposed to use the typical or average maintenance dose to
                determine the drug costs for each of the bundles. As dosing for some,
                but not all, of these drugs varies considerably, this approach attempts
                to strike an appropriate balance between high- and low-dose drug
                regimens in the context of a bundled payment. Specifically, we proposed
                to calculate payment rates using a 100 mg daily dose for methadone, a
                10 mg daily dose for oral buprenorphine, a 100 mg monthly dose for the
                extended-release buprenorphine injection, four rods each containing
                74.2 mg of buprenorphine for the 6-month buprenorphine implant, and a
                380 mg monthly dose for extended-release injectable naltrexone. We
                solicited public comments on our proposal to use the typical
                maintenance dose in order to calculate the drug component of the
                bundled payment rate for each of the proposed codes. We also solicited
                comment on the specific typical maintenance dosage level that we have
                identified for each drug, and a process for identifying the typical
                maintenance dose for new opioid agonist or antagonist treatment
                medication approved by the FDA under section 505 of the FFDCA when such
                medications are billed using the medication NOS code, such as using the
                FDA-approved prescribing information or a review of the published,
                preferably peer-reviewed, literature. We noted that the bundled payment
                rates were intended to be comprehensive with respect to the drugs
                provided; therefore, we did not intend to include any other amounts
                related to drugs, other than for administration, as discussed below.
                This means, for example, that we would not pay for drug wastage, which
                we did not anticipate to be significant in the OTP setting.
                    We received several comments on our proposal to use typical
                maintenance dosage levels to calculate payment rates.
                    Comment: One commenter expressed concern over the proposal to use
                average maintenance doses to determine the drug cost component of the
                bundled payment. This commenter noted that TRICARE explicitly rejected
                this approach for buprenorphine and naltrexone due to significant
                variation in the dosage and frequency of administration for these
                drugs; and, instead, suggested an alternative methodology that would
                more appropriately account for variations in the clinical needs of
                patients.
                    Response: While the TRICARE payment rates for OTP services were
                considered in determining the Medicare payment for OTP services, we
                note that section 1834(w)(2) of the Act expressly directs the Secretary
                to implement the Medicare OTP benefit using one or more payment
                bundles. We recognize that there may be some variation in the dosage
                and frequency of administration of these medications. Some
                beneficiaries may receive a larger than average dose, while other
                beneficiaries will receive a smaller than average dose; but payment
                based on the typical dose means that, across the Medicare beneficiaries
                served by the OTP, the payment amount should be reasonable and
                represent the average costs incurred in furnishing the drug component
                of the OUD treatment services. We believe the proposal to use the
                typical maintenance dosages is a reasonable approach to address the
                variable dosing of these medications within the statutory direction to
                implement this payment through one or more bundles.
                    Comment: Most commenters agreed that the proposed 100 mg daily dose
                for methadone was reasonable. A couple of commenters also agreed with
                the proposed typical maintenance dosages of four rods each containing
                74.2 mg of buprenorphine for the 6-month buprenorphine implant and a
                380 mg monthly dose for extended-release injectable naltrexone.
                However, several commenters stated that the proposed typical
                maintenance dosage for oral buprenorphine of 10 mg is too low. A few
                commenters suggested that there is evidence indicating that higher
                doses of buprenorphine are associated with better treatment retention.
                Other commenters stated that OTP patients respond better to a higher
                dosing level of oral buprenorphine, in part, because they tend to have
                a longer history of opioid abuse. Commenters suggested potential
                alternative dosages ranging from 12-20 mg. Several commenters suggested
                setting the typical maintenance dosage for oral buprenorphine at 16 mg
                per day. One commenter noted this dosage is supported by SAMHSA's
                Treatment Improvement Protocol (TIP) 63 (located at https://store.samhsa.gov/system/files/sma18-5063fulldoc.pdf). In addition,
                while a few commenters stated that the 100 mg monthly dose for the
                extended-release buprenorphine injection was the appropriate
                maintenance dose, some commenters noted it would not adequately account
                for the first 2 months of treatment at the higher dose of 300 mg per
                month. Another commenter stated that there was
                [[Page 62651]]
                evidence indicating certain patients would require longer treatment
                with the higher dose of the extended-release buprenorphine injection
                and that the FDA label instructions allowed consideration of increasing
                the maintenance dose to 300 mg monthly for patients in which the
                benefits outweigh the risk. One commenter stated that CMS would need to
                better define how the average maintenance dose was calculated in order
                to allow for comment on the methodology.
                    Response: We disagree with the commenter who stated that there was
                insufficient detail provided in the proposed rule in order to comment
                on the proposed average maintenance doses. As we described in the
                proposed rule, we identified the typical maintenance dose for each
                medication using the FDA-approved prescribing information or through a
                review of the published, preferably peer-reviewed, literature. We also
                included a reference in the proposed rule to each of the sources used
                to identify the typical maintenance doses.
                    We note that, as the HCPCS codes for the extended-release
                buprenorphine injection (that is, Q9991: Buprenorphine XR 100 mg or
                less and Q9992: Buprenorphine XR over 100 mg) have the same payment
                rate; therefore, we do not believe that it is necessary to establish a
                second typical maintenance dose to calculate the payment rate for this
                drug. However, we agree that the typical maintenance dosage for oral
                buprenorphine should be set higher than the proposed 10 mg. The range
                offered by commenters was between 12 mg and 20 mg, with a 16 mg per day
                dose receiving the most support. We also note that SAMHSA's TIP 63 and
                the FDA labeling support a target dosage of 16 mg for maintenance
                treatment.\55\
                ---------------------------------------------------------------------------
                    \55\ See https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/022410s038lbl.pdf.
                ---------------------------------------------------------------------------
                    After consideration of the public comments, we are finalizing our
                proposal to use the typical maintenance dosages to calculate payment
                rates for the drug component of the weekly bundles (that is, a 100 mg
                daily dose for methadone, a 100 mg monthly dose for the extended-
                release buprenorphine injection, four rods each containing 74.2 mg of
                buprenorphine for the 6-month buprenorphine implant, and a 380 mg
                monthly dose for extended-release injectable naltrexone) except that
                the payment rate for the drug component of the oral buprenorphine
                bundle will be calculated using a typical maintenance dose of 16 mg
                daily, rather than a 10 mg dose.
                i. Potential Drug Pricing Data Sources
                    Payment structures that are closely tailored to the provider's
                actual acquisition cost reduce the likelihood that a drug will be
                chosen primarily for a reason that is unrelated to the clinical care of
                the patient, such as the drug's profit margin for a provider. We
                proposed to estimate an OTP's costs for the drug component of the
                bundles based on available data regarding drug costs rather than a
                provider-specific cost-to-charge ratio or another more direct
                assessment of facility or industry-specific drug costs. OTPs do not
                currently report costs associated with their services to the Medicare
                program, and we did not believe that a cost-to-charge ratio based on
                such reported information could be available for a significant period
                of time. Furthermore, we explained that we are unaware of any industry-
                specific data that may be used to more accurately assess the prices at
                which OTPs acquire the medications used for OUD treatment. Therefore,
                we proposed to estimate an OTP's costs for the drugs used in MAT based
                on other available data sources, rather than applying a cost-to-charge
                ratio or another more direct assessment of drug acquisition cost;
                however, we also noted that we intended to continue to explore
                alternate ways to gather this information. As described in greater
                detail below, we proposed that the payment amounts for the drug
                component of the bundles be based on CMS pricing mechanisms currently
                in place. We solicited comment on other potential data sources for
                pricing OUD treatment medications either generally or specifically with
                respect to acquisition by OTPs. In the case of oral drugs that we
                proposed to include in the OTP bundled payments and for which we do not
                receive manufacturer-submitted ASP data, we explained that we were
                considering several potential approaches for determining the payment
                amounts for the drug component of the bundles. Although we did not
                propose a specific pricing mechanism, we solicited comments on several
                different approaches, and stated that we intended to develop a final
                policy for determining the payment amount for the drug component of the
                relevant bundles after considering the comments received.
                    In considering the payment amount for the drug component of each of
                the bundled payments that include a drug, we began by breaking the
                drugs into two categories based on their current coverage and payment
                by Medicare. First, we discussed the injectable and implantable drugs,
                which are generally covered and paid for under Medicare Part B, and
                then discussed the oral medications, which are generally covered and
                paid for under Medicare Part D.\56\ Buprenorphine (injection),
                buprenorphine (implant), and naltrexone (injection) would fall into the
                former category and methadone and buprenorphine (oral) would fall into
                the latter category.
                ---------------------------------------------------------------------------
                    \56\ Because, by law, methadone used in MAT cannot be dispensed
                by a pharmacy, it is not currently considered a Part D drug when
                used for MAT. Methadone used for this purpose can be dispensed only
                through an OTP certified by SAMHSA. However, methadone dispensed for
                pain may be considered a Part D drug and can be dispensed by a
                pharmacy.
                ---------------------------------------------------------------------------
                ii. Part B Drugs
                    Part B includes a limited drug benefit that encompasses drugs and
                biologicals described in section 1861(t) of the Act. Currently, covered
                Part B drugs fall into three general categories: Drugs furnished
                incident to a physician's services, drugs administered via a covered
                item of durable medical equipment, and other drugs specified by statute
                (generally in section 1861(s)(2) of the Act). Types of providers and
                suppliers that are paid for all or some of the Medicare-covered Part B
                drugs that they furnish include physicians, pharmacies, durable medical
                equipment suppliers, hospital outpatient departments, and end-stage
                renal disease (ESRD) facilities.
                    The majority of Part B drug expenditures are for drugs furnished
                incident to a physician's service. Drugs furnished incident to a
                physician's service are typically injectable drugs that are
                administered in a non-facility setting (covered under section
                1861(s)(2)(A) of the Act) or in a hospital outpatient setting (covered
                under section 1861(s)(2)(B) of the Act). The statute (sections
                1861(s)(2)(A) and 1861(s)(2)(B) of the Act) limits ``incident to''
                services to drugs that are not usually self-administered; self-
                administered drugs, such as orally administered tablets and capsules
                are not paid for under the ``incident to'' provision. Payment for drugs
                furnished incident to a physician's service falls under section 1842(o)
                of the Act. In accordance with section 1842(o)(1)(C) of the Act,
                ``incident to'' drugs furnished in a non-facility setting are paid
                under the methodology in section 1847A of the Act. ``Incident to''
                drugs furnished in a facility setting also are paid using the
                methodology in section 1847A of the Act when it has been incorporated
                under the relevant payment system (for
                [[Page 62652]]
                example, the Hospital Outpatient Prospective Payment System
                (OPPS)).\57\
                ---------------------------------------------------------------------------
                    \57\ See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                ---------------------------------------------------------------------------
                    In most cases, payment using the methodology in section 1847A of
                the Act means payment is determined based on the ASP plus a
                statutorily-mandated 6 percent add-on. The payment for these drugs does
                not include costs for administering the drug to the patient (for
                example, by injection or infusion); payments for these physician and
                hospital services are made separately, and the payment amounts are
                determined under the PFS \58\ and the OPPS, respectively. The ASP
                payment amount determined under section 1847A of the Act reflects a
                volume-weighted ASP for all NDCs that are assigned to a HCPCS code. The
                ASP is calculated quarterly using manufacturer-submitted data on sales
                to all purchasers (with limited exceptions as articulated in section
                1847A(c)(2) of the Act, such as for sales at nominal charge and sales
                exempt from best price) with manufacturers' rebates, discounts, and
                price concessions reflected in the manufacturer's determination of ASP.
                ---------------------------------------------------------------------------
                    \58\ See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
                ---------------------------------------------------------------------------
                    Although the Part B drug benefit is generally considered to be
                limited in scope, it includes many categories of drugs and encompasses
                a variety of care settings and payment methodologies. In addition to
                the ``incident to'' drugs described above, Part B also covers and pays
                for certain oral drugs with specific benefit categories defined under
                section 1861(s) of the Act, including certain oral anti-cancer drugs
                and certain oral antiemetic drugs. In accordance with section
                1842(o)(1) of the Act or through incorporation under the relevant
                payment system as discussed above, most of these oral Part B drugs are
                also paid based on the ASP methodology described in section 1847A of
                the Act.
                    However, at times Part B drugs are paid based on wholesale
                acquisition cost (WAC) as authorized under section 1847A(c)(4) of the
                Act \59\ or average manufacturer price (AMP)-based price substitutions
                as authorized under section 1847A(d) of the Act \60\. Also, in
                accordance with section 1842(o) of the Act, other payment methodologies
                may be applied to determine the payment amount for certain Part B
                drugs, for example, AWP-based payments (using current AWP) are made for
                influenza, pneumococcal pneumonia, and hepatitis B vaccines.\61\ We
                also use current AWP to make payment under the OPPS for very new drugs
                without an ASP.\62\ Contractors may also make independent payment
                amount determinations in situations where a national price is not
                available for physician and other supplier claims and for drugs that
                are specifically excluded from payment based on section 1847A of the
                Act (for example, radiopharmaceuticals as noted in section 303(h) of
                the Medicare Prescription Drug, Improvement and Modernization Act of
                2003 (MMA) (Pub. L. 108-173, enacted December 8, 2003). In such cases,
                pricing may be determined based on compendia or invoices.\63\
                ---------------------------------------------------------------------------
                    \59\ See 75 FR 73465-73466, the section titled Partial Quarter
                ASP data.
                    \60\ See 77 FR 69140.
                    \61\ Section 1842(o)(1)(A)(iv) of the Act.
                    \62\ 80 FR 70426 and 80 FR 70442-3; Medicare Claims Processing
                Manual 100-04, Chapter 17, Section 20.1.3.
                    \63\ Medicare Claims Processing Manual 100-04, Chapter 17,
                Section 20.1.3.
                ---------------------------------------------------------------------------
                    While most Part B drugs are paid based on the ASP methodology,
                MedPAC has noted that the ASP methodology may encourage the use of more
                expensive drugs because the 6 percent add-on generates more revenue for
                more expensive drugs.\64\ The ASP payment amount also does not vary
                based on the price an individual provider or supplier pays to acquire
                the drug. The statute does not identify a reason for the additional 6
                percent add-on above ASP; however, as noted in the MedPAC report (and
                by sources cited in the report), the add-on is needed to account for
                handling and overhead costs and/or for additional mark-up in the
                distribution channels that are not captured in the manufacturer-
                reported ASP.\65\
                ---------------------------------------------------------------------------
                    \64\ See MedPAC Report to the Congress: Medicare and the Health
                Care Delivery System June 2015, pages 65-72.
                    \65\ Ibid.
                ---------------------------------------------------------------------------
                    We proposed to use the methodology in section 1847A of the Act
                (which bases most payments on ASP) to set the payment rates for the
                ``incident to'' drugs. However, we proposed to limit the payment
                amounts for ``incident to'' drugs to 100 percent of the volume-weighted
                ASP for a HCPCS code instead of 106 percent of the volume-weighted ASP
                for a HCPCS code. We explained our belief that limiting the add-on
                would incentivize the use of the most clinically appropriate drug for a
                given patient. In addition, we noted that it was our understanding that
                many OTPs purchase directly from drug manufacturers, thereby limiting
                the markup from distribution channels. We also proposed to use the same
                version of the quarterly manufacturer-submitted data used for
                calculating the most recently posted ASP data files in preparing the CY
                2020 payment rates for OTPs. We noted that the quarterly ASP Drug
                Pricing Files include ASP plus 6 percent payment amounts.\66\
                Accordingly, we adjusted these amounts consistent with our proposal to
                limit the payment amounts for these drugs to 100 percent of the volume-
                weighted ASP for a HCPCS code. The proposed payment rates can be found
                in Table 15 of the CY 2020 PFS proposed rule (84 FR 40537). We proposed
                to codify the ASP payment methodology for the drug component of weekly
                bundles that include implantable or injectable medications at Sec.
                410.67(d)(2). We solicited public comment on the proposals, as well as
                on using alternative ASP-based payments to price these drugs, such as a
                rolling average of the past year's ASP payment rates.
                ---------------------------------------------------------------------------
                    \66\ See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/2016ASPFiles.html.
                ---------------------------------------------------------------------------
                    We received several comments on our proposals regarding pricing of
                Part B drugs. The following is a summary of the comments received and
                our responses.
                    Comment: Several commenters expressed concern regarding the
                proposal to use the methodology in section 1847A of the Act (which
                bases most payments on ASP) to set the payment rates for the ``incident
                to'' drugs and to limit the payment amounts to 100 percent of the
                volume-weighted ASP for a code instead of 106 percent of the volume-
                weighted ASP for a code. (We note that a similar proposal for setting
                the payment rates for the oral OTP drugs follows and that several of
                the comments we received did not specifically reference which group of
                drugs they were addressing; therefore, we have included a discussion of
                these comments under both sections.) A few commenters supported the
                proposal, reasoning that ASP provides a transparent and public
                benchmark that would allow monitoring for unexpected and unnecessary
                price changes by manufacturers.
                    Several other commenters expressed concerns about the proposal to
                price the Part B injectable and implantable drugs used in the bundle
                using the ASP without the 6 percent add-on. Commenters noted that the
                add-on is a necessary part of the payment to account for items such as
                overhead costs and/or additional mark-ups in the traditional drug
                distribution channels that are not captured in the manufacturer-
                reported ASP. A few commenters stated that the 6 percent
                [[Page 62653]]
                add-on would allow the OTP to recoup costs associated with rigorous
                storage and inventory tracking systems required by the DEA. These
                commenters also stated that the large OTPs, hospitals, and physician
                systems could skew ASP lower than the prices that smaller or rural OTPs
                could negotiate on their own. One commenter expressed concerns that
                OTPs might not be able to afford Part B drugs without the add-on to
                cover these costs, and suggested a cautious approach to ensure the
                success of these programs. A few commenters noted that the proposal to
                price Part B drugs using ASP without the 6 percent add-on would provide
                a disincentive for an OTP to utilize the most appropriate product for
                the patient in order to limit their cost of care. Some commenters
                objected to CMS' statement in the proposed rule that limiting the 6
                percent add-on would incentivize the use of the most clinically
                appropriate drug for a given patient asserting that the 6 percent add-
                on does not provide an incentive to choose high-cost treatment
                inappropriately because physicians do not profit from administering
                Part B drugs under the ASP methodology. Several commenters also
                questioned CMS' legal authority to limit the payment amount for these
                drugs to 100 percent of the ASP.
                    Response: We thank the commenters for their feedback on our
                proposal to set the payment amounts for ``incident to'' drugs at 100
                percent of the volume-weighted ASP. We agree that use of ASP provides a
                transparent and public benchmark for manufacturers' pricing as it
                reflects the manufacturers' actual sales prices to all purchasers (with
                limited exceptions) and is the only pricing methodology that includes
                off-invoice rebates and discounts as described in section 1847A(c)(3)
                of the Act. For this reason, we believe the ASP to be the most market-
                based approach to set drug prices for the OTP bundled payments.
                    As noted above, section 1834(w) of the Act grants the Secretary
                significant discretion to establish bundled payment rates for OUD
                treatment services. The statute does not dictate the use of any
                specific methodology, such as the methodology in section 1847A of the
                Act, in setting the payment rate for the drug component of the bundled
                payments. Therefore, we do not agree with the comments that indicated
                CMS has a legal obligation to include the 6 percent add-on when using
                ASP to determine the payment rate for the drug component of the bundled
                payments to OTPs for OUD treatment services.
                    As noted in the proposed rule, we understand that many OTPs
                purchase medications directly from drug manufacturers, thereby limiting
                the markup from distribution channels. We received this information
                during a routine informational industry call with OTP advocates in
                preparation for drafting the proposed rule. We also note that this fact
                was not challenged by any of the commenters. Furthermore, we do not
                believe the record-keeping or storage requirements noted are unique to
                OTPs. In fact, the selection of drugs purchased by most OTPs is quite
                limited, which theoretically limits the utility of third-parties, such
                as wholesalers, and their associated costs and increases the purchase
                volume for OTPs and accompanying manufacturer discounts. We believe
                that this situation could lend itself to an OTP drug channel for
                purchasing at discounted rates either directly or through the use of
                buying groups as is the standard in the pharmacy industry today.
                Furthermore, we remain concerned that certain providers will look to
                differential drug costs to determine which therapies to offer. As a
                result, we believe that our proposed approach of paying for ``incident
                to'' drugs based on ASP offers the most appropriate balance between
                ensuring OTPs receive appropriate reimbursement for their drug
                acquisition costs, while also preserving the incentive to use the most
                clinically appropriate drug for the treatment of individual
                beneficiaries.
                    After consideration of the public comments, we are finalizing our
                proposal to use the methodology in section 1847A of the Act (which
                bases most payments on ASP) to set the payment rates for the ``incident
                to'' drugs and to limit the payment amounts for these drugs to 100
                percent of the volume-weighted ASP for a drug category or code. We are
                codifying this policy in the regulations at Sec.  410.67(d)(2)(i)(A).
                However, we continue to be interested in feedback regarding drug
                acquisition costs for OTP providers, and in particular any drug
                acquisitions that exceed these rates after factoring in discounts,
                rebates, etc., and, if necessary, may revisit the payment methodology
                for ``incident to'' OTP drugs in future rulemaking to ensure that OTPs'
                drug acquisition costs are appropriately reimbursed.
                iii. Oral Drugs
                    We proposed to use ASP-based payment, which would be determined
                based on ASP data that have been calculated consistent with the
                provisions in 42 CFR part 414, subpart 800, to set the payment rates
                for the oral product categories when we receive manufacturer-submitted
                ASP data for these drugs. We stated that we believe using the ASP
                pricing data for oral OTP drugs currently covered under Part D \67\
                would facilitate the computation of the estimated costs of these drugs.
                However, we acknowledged that we do not collect ASP pricing information
                under section 1927(b) of the Act for these drugs. We solicited public
                comment on whether manufacturers would be willing to submit ASP pricing
                data for OTP drugs currently covered under Part D on a voluntary basis.
                ---------------------------------------------------------------------------
                    \67\ Please note that methadone is not currently considered a
                Part D drug when used for MAT. Methadone used for this purpose can
                be dispensed only through an OTP certified by SAMHSA. However,
                methadone dispensed for pain may be considered a Part D drug.
                ---------------------------------------------------------------------------
                    We also proposed to limit the payment amounts for oral drugs to 100
                percent of the volume-weighted ASP for a HCPCS code instead of 106
                percent of the volume-weighted ASP for that HCPCS code. We explained
                our belief that limiting the 6 percent add-on would incentivize the use
                of the most clinically appropriate drug for a given patient. In
                addition, we explained our understanding that many OTPs purchase
                directly from drug manufacturers, thereby limiting the markup from
                distribution channels. We proposed to use the same version of the
                quarterly manufacturer-submitted data used for calculating the most
                recently posted ASP data files in preparing the CY 2020 payment rates
                for OTPs. We noted that the quarterly ASP Drug Pricing Files include
                ASP plus 6 percent payment amounts.\68\ Accordingly, we would adjust
                these amounts consistent with our proposal to limit the payment amounts
                for these drugs to 100 percent of the volume-weighted ASP for a HCPCS
                code. The proposed payment rates were provided in Table 15 of the
                proposed rule. We proposed to codify the ASP payment methodology for
                the drug component of weekly bundles that include an oral medication at
                Sec.  410.67(d)(2)(i)(B). We solicited public comment on these
                proposals, as well as on using alternative ASP-based payments to price
                these drugs, such as a rolling average of the past year's ASP payment
                rates.
                ---------------------------------------------------------------------------
                    \68\ See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/2016ASPFiles.html.
                ---------------------------------------------------------------------------
                    In the event that we do not receive manufacturer-submitted ASP
                pricing data, we also considered several potential alternative pricing
                mechanisms to estimate the payment amounts for oral drugs typically
                paid for under Medicare Part D but that would become OTP drugs paid
                under Part B when used as part of MAT in an OTP.
                [[Page 62654]]
                We did not propose a specific pricing mechanism for these drugs at this
                time, but solicited public comment on the following potential
                approaches for estimating the acquisition cost and payment amounts for
                these drugs and on alternative approaches. We noted that we would
                consider the comments received in developing our final policy for
                determining these drug prices.
                Approach 1: The Methodology in Section 1847A of the Act
                    One approach for estimating the cost of the drugs that are
                currently covered under Part D and for which ASP data are not available
                would be to use the methodology in section 1847A of the Act. Please see
                above for a discussion of the payment methodology in section 1847A of
                the Act. Under the methodology in section 1847A of the Act, when ASP
                data are not available, this option would price drugs using, for
                example, WAC or invoice pricing.
                Approach 2: Medicare Part D Prescription Drug Plan Finder Data
                    On January 28, 2005, we issued the ``Medicare Program; Medicare
                Prescription Drug Benefit'' final rule (70 FR 4194) which implemented
                the Medicare voluntary prescription drug benefit, as enacted by section
                101 of the MMA. Beginning on January 1, 2006, a prescription drug
                benefit program was available to beneficiaries with much broader drug
                coverage than was previously provided under Part B to include: Brand-
                name prescription drugs and biologicals, generic drugs, biosimilars,
                vaccines, and medical supplies associated with the injection of
                insulin.\69\ This prescription drug benefit is offered to Medicare
                beneficiaries through Medicare Advantage Drug Plans (MA-PDs) and stand-
                alone Prescription Drug Plans (PDPs). The prescription drug benefit
                under Medicare Part D is administered based on the ``negotiated
                prices'' of covered Part D drugs. Under Sec.  423.100 of the Part D
                regulations, the negotiated price of a Part D drug equals the amount
                paid by the Part D sponsor (or its pharmacy benefit manager) to the
                pharmacy at the point-of-sale for that drug. Typically, these Part D
                ``negotiated prices'' are based on AWP minus a percentage for brand
                drugs or either the maximum allowable cost, which is based on
                proprietary methodologies used to establish the same payment for
                therapeutically equivalent products marketed by multiple labelers with
                different AWPs, or the Generic Effective Rate, which guarantees
                aggregate minimum reimbursement (for example, AWP-85 percent). The
                negotiated price under Part D also includes a dispensing fee (for
                example, $1-$2), which is added to the cost of the drug.
                ---------------------------------------------------------------------------
                    \69\ See section 1860D-2(e) of the Act.
                ---------------------------------------------------------------------------
                    Many of the beneficiaries who choose to enroll in Part D drug plans
                must pay premiums, deductibles, and copayments/co-insurance. The
                Medicare Prescription Drug Plan Finder is an online tool available at
                http://www.medicare.gov. This web tool allows beneficiaries to make
                informed choices about enrolling in Part D plans by comparing the
                plans' benefit packages, premiums, formularies, pharmacies, and pricing
                data. PDPs and MA-PDs are required to submit this information to CMS
                for posting on the Medicare Drug Plan Finder. The database structure
                provides the drug pricing and pharmacy network information necessary to
                accurately communicate plan information in a comparative format. The
                Medicare Prescription Drug Plan Finder displays information on
                pharmacies that are contracted to participate in the sponsors' network
                as either retail or mail order pharmacies.
                    Another approach for estimating the cost of the drugs that are
                currently covered under Part D and for which ASP data are not available
                would be to use data retrieved from the online Medicare Prescription
                Drug Plan Finder. For example, the Part D drug prices for each drug
                used by an OTP as part of MAT could be estimated based on a national
                average price charged by all Part D plans and their network pharmacies.
                However, the prices listed in the Medicare Prescription Drug Plan
                Finder generally reflect the prices that are negotiated by larger
                buying groups, as larger pharmacies often have significant buying power
                and smaller pharmacies generally contract with a pharmacy services
                administrative organization (PSAO). As a result, we indicated that our
                primary concern with this pricing approach is that such prices may fail
                to reflect the drug prices that smaller OTP facilities may pay in
                acquiring these drugs and could therefore disadvantage these
                facilities. We explained that if we were to select this pricing
                approach for oral drugs for which ASP data are not available, we would
                anticipate setting the pricing for these drugs using the most recent
                Medicare Prescription Drug Plan Finder data available at the drafting
                of this CY 2020 PFS final rule. We noted that, for the Part B ESRD
                prospective payment system (PPS) outlier calculation, which provides
                ESRD facilities with additional payment in situations where the costs
                for treating patients exceed an established threshold under the ESRD
                PPS, we chose to adopt the ASP methodology in section 1847A of the Act,
                and the other pricing methodologies under section 1847A of the Act, as
                appropriate, when ASP data are not available, to price the renal
                dialysis drugs and biological products that were or would have been
                separately billable under Part B prior to implementation of the ESRD
                PPS,\70\ and the national average drug prices based on the Medicare
                Prescription Drug Plan Finder as the data source for pricing the renal
                dialysis drugs or biological products that were or would have been
                separately covered under Part D prior to implementation of the ESRD
                PPS.\71\
                ---------------------------------------------------------------------------
                    \70\ 82 FR 50742 through 50745.
                    \71\ 75 FR 49142.
                ---------------------------------------------------------------------------
                    In the proposed rule, we stated that we believe all of the MAT
                drugs proposed for inclusion in the OTP benefit that are currently
                covered under Part D have clinical treatment indications beyond MAT
                such as for the treatment of pain.\72\ These drugs will continue to be
                covered under Part D for these other indications. Buprenorphine will
                continue to be covered under Part D for MAT as well. Consequently, Part
                D pricing information should continue to be available for these drugs
                and could be used in the computation of payment under the approach
                discussed above.
                ---------------------------------------------------------------------------
                    \72\ For example, while methadone is not covered by Medicare
                Part D for MAT, methadone dispensed for pain may be considered a
                Part D drug.
                ---------------------------------------------------------------------------
                    Because, by law, methadone used in MAT cannot be dispensed by a
                pharmacy, it is not currently considered a Part D drug when used for
                MAT. Methadone used for this purpose can be dispensed only through an
                OTP certified by SAMHSA. However, methadone dispensed for pain may be
                considered a Part D drug and can be dispensed by a pharmacy.
                Accordingly, we also solicited comment on the applicability of Part D
                payment rates for methadone dispensed by a pharmacy to methadone
                dispensed by an OTP for MAT.
                Approach 3: Wholesale Acquisition Cost (WAC)
                    Another approach for estimating the cost of the oral drugs that we
                proposed to include as part of the bundled payments, but for which ASP
                data are not available, would be to use WAC. Section 1847A(c)(6)(B) of
                the Act defines WAC as the manufacturer's list price for the drug to
                wholesalers or direct purchasers in the U.S., not including prompt pay
                or other discounts, rebates, or reductions in price, for the most
                recent month for
                [[Page 62655]]
                which the information is available, as reported in wholesale price
                guides or other publications of drug pricing data. As noted above in
                the discussion of Part B drugs, WAC is used as the basis for pricing
                some Part B drugs; for example, it is used when it is less than ASP in
                the case of single source drugs (section 1847A(b)(4) of the Act) and in
                cases where ASP is unavailable during the first quarter of sales
                (section 1847A(c)(4) of the Act).
                    Because WAC is the manufacturer's list price to wholesalers, we
                noted that we believe it is more reflective of the price paid by the
                end user than the AWP. As a result, we believe that this pricing
                mechanism would be consistent with pricing that currently occurs for
                drugs that are separately billable under Part B. However, we have
                concerns about the fact that WAC does not include prompt pay or other
                discounts, rebates, or reductions in price. We noted that if we were to
                select this option to estimate the cost of certain drugs, we would
                develop pricing using the most recent data files available at the time
                of drafting this CY 2020 PFS final rule.
                Approach 4: National Average Drug Acquisition Cost (NADAC)
                    Another approach for estimating the cost of the oral drugs that we
                proposed to include as part of the bundled payments, but for which ASP
                data are not available, would be to use Medicaid's NADAC survey. This
                survey provides another national drug pricing benchmark. CMS conducts
                surveys of retail community pharmacy prices, including drug ingredient
                costs, to develop the NADAC pricing benchmark. The NADAC was designed
                to create a national benchmark that is reflective of the prices paid by
                retail community pharmacies to acquire prescription and over-the-
                counter covered outpatient drugs and is available for consideration by
                states to assist with their individual pharmacy payment policies.
                    State Medicaid agencies reimburse pharmacy providers for prescribed
                covered outpatient drugs dispensed to Medicaid beneficiaries. The
                reimbursement formula consists of two parts: (1) Drug ingredient costs;
                and (2) a professional dispensing fee. In a final rule with comment
                period titled ``Medicaid Program; Covered Outpatient Drugs,'' which
                appeared in the February 1, 2016 Federal Register (81 FR 5169), we
                revised the methodology that state Medicaid programs use to determine
                drug ingredient costs, establishing an Actual Acquisition Cost (AAC)
                based determination, as opposed to a determination based on estimated
                acquisition costs (EAC). AAC is defined at 42 CFR 447.502 as the
                agency's determination of the pharmacy providers' actual prices paid to
                acquire drugs marketed or sold by specific manufacturers. As explained
                in the Covered Outpatient Drugs final rule with comment period (81 FR
                5175), we believe shifting from an EAC to an AAC based determination of
                ingredient costs is more consistent with the dictates of section
                1902(a)(30)(A) of the Act. In 2010, a working group within the National
                Association of State Medicaid Directors (NASMD) recommended the
                establishment of a single national pricing benchmark based on average
                drug acquisition costs. Pricing metrics based on actual drug purchase
                prices provide greater accuracy and transparency in how drug prices are
                established and are more resistant to manipulation. The NASMD requested
                that CMS coordinate, develop, and support this benchmark.
                    Section 1927(f) of the Act provides, in part, that CMS may contract
                with a vendor to conduct monthly surveys with respect to prices for
                covered outpatient drugs dispensed by retail community pharmacies. We
                entered into a contract with Myers & Stauffer, LLC to perform a monthly
                nationwide retail price survey of retail community pharmacy covered
                outpatient drug prices (CMS-10241, OMB 0938-1041) and to provide states
                with weekly updates on pricing files, that is, the NADAC files. The
                NADAC survey process focuses on drug ingredient costs for retail
                community pharmacies. The survey collects acquisition costs for covered
                outpatient drugs purchased by retail pharmacies, which include invoice
                prices from independent and chain retail community pharmacies. The
                survey data provide information that CMS uses to assure compliance with
                federal requirements. In the proposed rule, we explained that we
                believe NADAC data could be used to set the prices for the oral drugs
                furnished by OTPs for which ASP data are not available. Survey data on
                invoice prices provide the closest pricing metric to ASP that we are
                aware of. However, we also noted that similar to the other available
                pricing metrics, we have concerns about the applicability of retail
                pharmacy prices to the acquisition costs available to OTPs since we
                have no evidence to suggest that these entities would be able to
                acquire drugs at a similar price point. We noted that if we were to
                select this option to estimate the cost of certain drugs, we would
                develop pricing using the most recent data files available at the time
                of drafting this CY 2020 PFS final rule.
                Alternative Methadone Pricing: TRICARE
                    We also considered an approach for estimating the cost of methadone
                using the amount calculated by TRICARE. As discussed above in this
                section of this final rule, the TRICARE rates for medications used in
                OTPs to treat OUD are spelled out in the 2016 TRICARE final rule (81 FR
                61068); in the regulations at 32 CFR 199.14(a)(2)(ix); and in Chapter
                7, Section 5 and Chapter 1, Section 15 of the TRICARE Reimbursement
                Manual 6010.61-M, April 1, 2015.
                    In the 2016 TRICARE final rule, DOD established separate payment
                methodologies for OTPs based on the particular medication being
                administered for treatment.\73\ Based on TRICARE's review of industry
                billing practices, the initial weekly bundled rate for administration
                of methadone included a daily drug cost of $3, which is subject to an
                update factor.\74\
                ---------------------------------------------------------------------------
                    \73\ 81 FR 61079.
                    \74\ 81 FR 61079.
                ---------------------------------------------------------------------------
                    We noted that this option would only be applicable for methadone
                because TRICARE has developed a FFS payment methodology for
                buprenorphine and naltrexone.\75\ In the 2016 TRICARE final rule, the
                DOD stated that the payments for buprenorphine and naltrexone are more
                variable in dosage and frequency for both the drug and non-drug
                services.\76\ Accordingly, TRICARE pays for drugs listed on Medicare's
                Part B ASP files, such as the injectable and implantable versions of
                buprenorphine using the ASP; drugs not appearing on the Medicare ASP
                file, such as oral buprenorphine, are priced at the lesser of billed
                charges or 95 percent of the AWP.\77\
                ---------------------------------------------------------------------------
                    \75\ 81 FR 61080.
                    \76\ 81 FR 61080.
                    \77\ https://manuals.health.mil/pages/DisplayManualHtmlFile/TR15/30/AsOf/TR15/C7S5.html; https://manuals.health.mil/pages/DisplayManualHtmlFile/TR15/30/AsOf/TR15/c1s15.html2FM10546.
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                    We stated that we believed that pricing methadone consistent with
                the TRICARE payment rate could provide a reasonable payment amount for
                methadone when ASP data are not available. As DOD noted in the 2016
                TRICARE final rule, ``a number of commenters indicated that they
                believed the rates DOD proposed for OTPs' services are near market
                rates and are acceptable.'' \78\
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                    \78\ 81 FR 61080.
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                    We proposed to codify this proposal to apply an alternative
                approach for determining the payment rate for oral drugs only if ASP
                data are not available in Sec.  410.67(d)(2)(i)(B). We solicited
                [[Page 62656]]
                public comment on the potential alternative approaches for estimating
                the cost of oral drugs that we proposed to include as part of the
                bundled payments but for which ASP data are not available, including
                any other alternate sources of data to estimate the cost of these oral
                MAT drugs. Payment rates based on these different options were set
                forth in Table 14 of the proposed rule. We stated that we would
                consider the comments received on these different approaches when
                deciding on the approach that we would use to determine the payment
                rates for oral drugs in the CY 2020 PFS final rule. We also solicited
                public comment on any other potential data sources for estimating the
                provider acquisition costs of OTP drugs currently paid under either
                Part B or Part D.
                    We received several comments on our proposals regarding pricing of
                oral drugs. The following is a summary of the comments received and our
                responses.
                    Comment: Several commenters submitted comments on the proposal to
                use ASP-based payment to set the payment rates for the oral product
                categories when we receive manufacturer-submitted ASP data for these
                drugs and to limit the payment amounts for oral drugs to 100 percent of
                the volume-weighted ASP instead of 106 percent of the volume-weighted
                ASP. (We note that a similar proposal for the injectable and
                implantable Part B drugs is discussed above and that several of the
                comments we received did not specifically reference which group of
                drugs they were concerning; therefore, we have included a discussion of
                these comments under both sections.) A few commenters supported the
                proposal, reasoning that ASP provides a transparent and public
                benchmark that would allow monitoring for unexpected and unnecessary
                price changes by manufacturers; and a couple of commenters encouraged
                us to require manufacturers to report these data.
                    Several other commenters expressed concerns about the proposal to
                price the oral drugs used in the bundle using the ASP without the 6
                percent add-on. Commenters stated that the add-on is a necessary part
                of the payment to account for things such as overhead costs and/or
                additional mark-ups in the traditional drug distribution channels that
                are not captured in the manufacturer-reported ASP. A few commenters
                stated that the 6 percent add-on would allow the OTP to recoup costs
                associated with rigorous storage and inventory tracking systems
                required by the DEA. These commenters also stated that large OTPs,
                hospitals, and physician systems could skew ASP lower than the prices
                that smaller or rural OTPs could negotiate on their own. One commenter
                expressed concerns that OTPs might not be able to afford the oral drugs
                used in MAT without the add-on to cover these costs, and suggested that
                the Administration should be overly cautious to ensure success of these
                programs. Some commenters expressed concerns that this proposal would
                provide a disincentive for an OTP to utilize the most appropriate
                product for the patient to limit their cost of care. Several commenters
                also questioned CMS' legal authority to limit the payment amount for
                these drugs to 100 percent of the ASP.
                    Response: We thank the commenters for their feedback on our
                proposal to use ASP-based payment to set the payment rates for the oral
                product categories when we receive manufacturer-submitted ASP data for
                these drugs and to limit the payment amounts for oral drugs to 100
                percent of the volume-weighted ASP instead of 106 percent of the
                volume-weighted ASP. We agree that use of ASP provides a transparent
                and public benchmark for manufacturers' pricing as it reflects the
                manufacturers' actual sales prices to all purchasers (with limited
                exceptions) and is the only pricing methodology that includes off-
                invoice rebates and discounts as described in section 1847A(c)(3) of
                the Act. For this reason, we believe the ASP to be the most market-
                based approach to set drug prices for the OTP benefit.
                    As noted above, section 1834(w) of the Act grants the Secretary
                considerable discretion to establish bundled payment rates for OUD
                treatment services. The statute does not dictate use of any specific
                methodology, such as the methodology in section 1847A of the Act, in
                setting these payments. We used our discretion, granted by the Act, in
                proposing to modify the methodology in section 1847A of the Act to set
                payments to OTPs for oral drugs for which ASP data are available.
                Therefore, we do not agree with the comments that indicated CMS has a
                legal obligation to include the 6 percent add--when using ASP to
                determine payments to OTPs for oral drugs.
                    As noted in the proposed rule, we understand that many OTPs
                purchase medications directly from drug manufacturers, thereby limiting
                the markup from distribution channels. We received this information
                during a routine informational industry call with OTP advocates in
                preparation for drafting the proposed rule. We also note that this fact
                was not challenged by any of the commenters. Furthermore, we do not
                believe the record-keeping or storage requirements noted are unique to
                OTPs. In fact, the selection of drugs purchased by most OTPs is quite
                limited, which theoretically limits the utility of third-parties, such
                as wholesalers, and their associated costs and increases the purchase
                volume for OTPs and accompanying manufacturer discounts. We believe
                that this situation could lend itself to an OTP drug channel for
                purchasing at discounted rates either directly or through the use of
                buying groups as is the standard in the pharmacy industry today.
                Furthermore, we remain concerned that certain providers will look to
                differential drug costs to determine which therapies to offer. As a
                result, we believe that our proposed approach of paying for oral drugs
                based on ASP, when available, offers an appropriate balance between
                ensuring OTPs receive appropriate reimbursement for their drug
                acquisition costs, while also preserving the incentive to use the most
                clinically appropriate drug for the treatment of individual
                beneficiaries.
                    After consideration of the public comments, we are finalizing our
                proposal to use ASP-based payment to set the payment rates for the oral
                drugs and to limit the payment amounts for these drugs to 100 percent
                of the volume-weighted ASP when it is available. However, we continue
                to be interested in feedback regarding drug acquisition costs for OTP
                providers, and in particular any drug acquisitions that exceed these
                rates after factoring in discounts, rebates, etc., and if necessary,
                may revisit the payment methodology for oral OTP drugs in future
                rulemaking to ensure that OTPs' drug acquisition costs are
                appropriately reimbursed.
                    Comment: A few commenters submitted comments on the potential
                pricing mechanisms described in the proposed rule to estimate the
                payment amounts for oral OTP drugs in the event that we do not receive
                manufacturer-submitted ASP pricing data. Some commenters supported
                establishing payments based on current Medicare law and practice, such
                as the rates provided under Part D, for other oral drugs. Another
                commenter advised against using methods such as AWP and WAC as these
                options can be manipulated by the manufacturers. This commenter also
                noted that NADAC and the Medicare Plan Finder prices may not be
                relevant to all OTP medications as they are retail-based price measures
                and OTPs are providers. One commenter suggested use of the methodology
                in section 1847A of the
                [[Page 62657]]
                Act, which would generally default to WAC-based payment if ASP is not
                reported. One commenter generally opposed the use of TRICARE rates,
                while another specifically stated that the current TRICARE payment rate
                for methadone, as presented in the proposed rule, is fair and should be
                used as a reference price for Medicare.
                    Response: We agree with commenters that using current programmatic
                pricing mechanisms where available is preferable to a pricing
                methodology that is novel and unproven. As oral buprenorphine used for
                OUD is currently dispensed by retail pharmacies, we believe that a
                retail-based pricing method may be most relevant to this drug product
                and more reflective of actual costs than a list price. As noted above,
                the NADAC survey collects acquisition costs for covered outpatient
                drugs purchased by retail pharmacies, which include invoice prices from
                independent and chain retail community pharmacies. Pricing metrics
                based on actual drug purchase prices provide greater accuracy and
                transparency in how drug prices are established and are more resistant
                to manipulation. As the NADAC survey data on invoice prices provide the
                closest pricing metric to ASP that we are aware of, we believe, at this
                time, that NADAC data would be the best pricing benchmark to set the
                prices for non-methadone oral drugs (that is, currently only the oral
                buprenorphine products) furnished by OTPs for which ASP data are not
                available. We further agree that retail pricing benchmarks, such as
                NADAC and Part D Plan Finder data, may not be particularly relevant for
                methadone, because methadone is not dispensed by retail pharmacies for
                this indication and its use for OUD is limited to OTPs. As a result, we
                believe that use of the TRICARE rate for methadone, when ASP data are
                not available, is currently the most applicable reference price for
                Medicare payment of methadone used in the OTP setting.
                    After consideration of the public comments, we are finalizing our
                proposal to use ASP-based payment to set the payment rates for the oral
                product categories when we receive manufacturer-submitted ASP data for
                these drugs and to limit the payment amounts for oral drugs to 100
                percent of the volume-weighted ASP. We have used the same version of
                the quarterly manufacturer-submitted data used for calculating the most
                recently posted ASP data files to determine the CY 2020 payment rates
                for OTPs. When ASP data are not available for the oral drugs used in
                OTPs, we are finalizing a policy under which we will use the TRICARE
                rate to set the payment for the drug component of the methadone bundle,
                and NADAC data to set the payment for the drug component of the oral
                buprenorphine bundle. Payment rates for these drugs are provided in
                Table 18. We note that, for purposes of determining payment for CY
                2020, we were able to calculate an ASP for methadone using manufacturer
                reported data. However, we did not receive ASP data from any of the
                buprenorphine oral manufacturers. Therefore, the drug component of the
                oral buprenorphine weekly bundle will be priced using NADAC survey
                data. We are finalizing this payment methodology for the oral drugs at
                Sec.  410.67(d)(2)(i)(B).
                (b) Non-Drug Component
                    To price the non-drug component of the bundled payments, we
                proposed to use a crosswalk to the non-drug component of the TRICARE
                weekly bundled rate for services furnished when a patient is prescribed
                methadone. As described above, in 2016, TRICARE finalized a weekly
                bundled rate for administration of methadone that included a daily drug
                cost of $3, along with a $15 per day cost for non-drug services (that
                is, the costs related to the intake/assessment, drug dispensing and
                screening and integrated psychosocial and medical treatment and
                supportive services). The daily projected per diem cost ($18/day) was
                converted to a weekly rate of $126 ($18/day x 7 days) (81 FR 61079).
                TRICARE updates the weekly bundled methadone rate for OTPs annually
                using the Medicare update factor used for other mental health care
                services rendered under TRICARE (that is, the Inpatient Prospective
                Payment System update factor) (81 FR 61079). The updated amount for CY
                2019 is $133.15 (of which $22.19 is the methadone cost and the
                remainder, $110.96, is for the non-drug services).\79\ In the proposed
                rule, we stated that we believed using the TRICARE weekly bundled rate
                would be a reasonable approach to setting the payment rate for the non-
                drug component of the bundled payments to OTPs, particularly given the
                time constraints in developing a payment methodology prior to the
                January 1, 2020 effective date of this new Medicare benefit category.
                The TRICARE rate is an established national payment rate that was
                established through notice and comment rulemaking. As a result, OTPs
                and other interested parties had an opportunity to present information
                regarding the costs of these services. Furthermore, the TRICARE rate
                describes a generally similar bundle of services to those services that
                are included in the definition of OUD treatment services in section
                1861(jjj)(1) of the Act. We recognized that there are differences in
                the patient population for TRICARE compared with the Medicare
                beneficiary population. However, as OTP services have not previously
                been covered by Medicare, we noted that it is not clear what impact, if
                any, these differences would have on the cost of the services included
                in the non-drug component of the bundled payments. We proposed to
                codify the methodology for determining the payment rate for the non-
                drug component of the bundled payments using the TRICARE weekly rate
                for non-drug services at Sec.  410.67(d)(2). As part of the proposal,
                we noted that we would plan to monitor utilization of non-drug services
                by Medicare beneficiaries and, if needed, would consider in future
                rulemaking ways we could tailor the TRICARE payment rate for these non-
                drug services to the Medicare population, including dually eligible
                beneficiaries.
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                    \79\ https://health.mil/Military-Health-Topics/Business-Support/Rates-and-Reimbursement/MHSUD-Facility-Rates.
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                    Because the TRICARE payment rate for the non-drug services included
                in its weekly bundled rate for methadone reflects the daily
                administration of methadone, as part of our proposed approach we
                indicated that we would adjust the TRICARE payment rate for non-drug
                services for most of the other bundled payments to more accurately
                reflect the cost of administering the other drugs used in MAT. For the
                oral buprenorphine bundled payment, we proposed to retain the same
                amount as the rate for the methadone bundled payment based on an
                assumption that this drug is also being dispensed daily. We stated that
                we understood that patients who have stabilized may be given 7-14 day
                supplies of oral buprenorphine at a time, but for the purposes of
                developing the proposed rates, we proposed to value this service to
                include daily drug dispensing to account for cases where daily drug
                dispensing is occurring. For the injectable drugs (buprenorphine and
                naltrexone), we proposed to subtract from the non-drug component, an
                amount that is comparable to the dispensing fees paid by several state
                Medicaid programs ($10.50) for a week of daily dispensing of methadone.
                This adjustment would account for the fact that these injectable drugs
                are not oral drugs that are dispensed daily; we proposed that we would
                then instead add the fee that Medicare pays for the
                [[Page 62658]]
                administration of an injection (which is currently $16.94 under the CY
                2019 non-facility Medicare payment rate for CPT code 96372). We
                proposed to update the amount of this adjustment annually using the
                same methodology that we were proposing to use to update the non-drug
                component of the bundled payments.
                    Similarly, we proposed that the payment rates for the non-drug
                component of the codes for the weekly bundled payments for
                buprenorphine implants would be adjusted to add an amount for insertion
                and/or removal of the implants based on a direct crosswalk to the non-
                facility payment rates under the Medicare PFS for the insertion,
                removal, or insertion and removal of these implants, which describe the
                physician work, PE, and malpractice costs associated with these
                procedures, and to remove the costs of daily drug dispensing
                (determined based on the dispensing fees paid by several state Medicaid
                programs for a week of daily dispensing of methadone, currently
                $10.50). For the code describing implant insertion, we proposed that we
                would use a crosswalk to the rate for HCPCS code G0516 (Insertion of
                non-biodegradable drug delivery implants, 4 or more (services for
                subdermal rod implant)); for the code describing implant removal, we
                proposed that we would use a crosswalk to the rate for HCPCS code G0517
                (Removal of non-biodegradable drug delivery implants, 4 or more
                (services for subdermal implants)); and for the code describing implant
                insertion and removal, we proposed that we would use a crosswalk to the
                rate for HCPCS code G0518 (Removal with reinsertion, non-biodegradable
                drug delivery implants, 4 or more (services for subdermal implants)).
                We note that in the proposed rule, we inadvertently misstated the
                amounts for HCPCS codes G0516, G0517, and G0518. The correct amounts
                for HCPCS codes G0516, G0517, and G0518 under the CY 2019 non-facility
                Medicare payment rate are $246.15, $265.61, and $465.26, respectively.
                    To determine the payment rates for the code describing a non-drug
                bundled payment, we proposed to use a crosswalk to the reimbursement
                rate for the non-drug services included in the TRICARE weekly bundled
                rate for administration of methadone, adjusted to subtract the cost of
                methadone dispensing (using an amount that is comparable to the
                dispensing fees paid by several state Medicaid programs for a week of
                daily dispensing of methadone, which is currently $10.50).
                    We proposed that the payment rate for the add-on code for each
                additional 30 minutes of counseling or group or individual therapy
                would be based on 30 minutes of substance use counseling and valued
                based on a crosswalk to the rates set by state Medicaid programs for
                similar services.
                    We received a number of public comments on our proposed payment
                rates for the non-drug component of the bundled payment and the add-on
                code for additional counseling or therapy services. The following is a
                summary of the comments we received and our responses.
                    Comment: Many commenters stated that the proposed rate for the non-
                drug component of the bundled payment was insufficient. A few
                commenters expressed concern that establishing a Medicare rate that is
                lower than the rates set by some state Medicaid programs would
                destabilize the market. Some commenters recommended that the single
                full week TRICARE payment rate should be the floor used to pay for a
                basic Medicare OTP benefit assuming a similar level of service and that
                any additional services, such as extra counseling and/or therapy
                visits, should be reimbursed outside of the bundle, as CMS proposed for
                counseling sessions above the basic benefit and stated that if
                additional services are added to the basic benefit, the bundled payment
                should increase to reflect the additional services. Some commenters
                stated that the proposed rate reflects a market rate that is
                significantly discounted, noting that it is benchmarked on an insurance
                industry practice rooted in stigma and limited resources and expressed
                concern that it may inadvertently limit access to care at a time when
                the opioid overdose epidemic continues to cause significant mortality.
                Additionally, a few commenters noted that the TRICARE rate reflects the
                average cost of care for the typical TRICARE patient, but that they
                believed Medicare patients would generally require more services. A few
                commenters noted that the only difference between OTPs and office-based
                OUD treatment is the means of regulation and medication offered, and
                that therefore, the different settings should not be cause to pay
                differentially. Some commenters encouraged CMS to adjust the payment
                rates to account for severity of illness. Several commenters stated
                that the proposed rate for counseling is too low, which would make it
                difficult for providers to employ qualified practitioners. Several
                commenters urged CMS to use a building block methodology, which sums
                the Medicare payment rates for similar services furnished in the non-
                facility setting, to calculate the payment rate for the non-drug
                component.
                    Response: After consideration of the public comments, we are
                finalizing a payment rate for the non-drug component that is calculated
                based on a building block methodology using the Medicare payment rates
                for similar services furnished in the non-facility setting. We note
                that we considered a variety of different rates, including TRICARE and
                Medicaid, and decided ultimately to use Medicare rates for similar
                services. We appreciate commenters' feedback about the TRICARE rate,
                including the concern that it reflects an average cost of care for the
                TRICARE patient population, and note that by finalizing payment rates
                using the established rates for similar services under Medicare, we
                believe these rates will be more reflective of the resource costs
                involved in furnishing services to the Medicare patient population. We
                also acknowledge that establishing a methodology under which Medicare
                payments would be less than those made by state Medicaid programs could
                create unnecessary barriers to access to care. Additionally, we
                recognize that a differential in payment OUD treatment services
                furnished by OTPs and OUD treatment furnished in the office setting may
                set up a disparity that could disadvantage OTPs.
                    The services that are included in the non-drug component of the
                weekly bundles are the same services that are included in the TRICARE
                rate, which are individual therapy, group therapy, substance use
                counseling, and toxicology testing. Therefore, we believe that a
                reasonable alternative approach is to finalize payment rates for the
                non-drug component of the bundled payments for CY 2020 that are
                determined using a building block methodology under which the payment
                rate for the same set of non-drug services is based on established
                rates for similar services under the Medicare PFS (non-facility rates),
                the Medicare CLFS, and state Medicaid programs.
                    Specifically, the payment rate we are finalizing for the non-drug
                component reflects the Medicare payment rates for the following codes
                as reference codes for the services that are included in the TRICARE
                rate, (individual therapy, group therapy, substance use counseling, and
                toxicology testing): CPT code 90832 (Psychotherapy, 30 minutes with
                patient), in CY 2019 is currently assigned a non-facility rate of
                $68.47 under the PFS; CPT code 90853 (Group psychotherapy (other than
                of a multiple-family group)), which in CY 2019 is assigned a non-
                facility rate of $27.39
                [[Page 62659]]
                under the PFS; HCPCS code G0396 (Alcohol and/or substance (other than
                tobacco) abuse structured assessment (e.g., audit, dast), and brief
                intervention 15 to 30 minutes), which in CY 2019 is assigned a non-
                facility rate of $30.94 under the PFS when furnished by nonphysician
                practitioners (NPPs), as we believe this is a more accurate reflection
                of the practitioner type who would be furnishing substance use
                counseling in an OTP; CPT code 80305 (Drug test(s), presumptive, any
                number of drug classes, any number of devices or procedures; capable of
                being read by direct optical observation only (e.g., utilizing
                immunoassay [e.g., dipsticks, cups, cards, or cartridges]), includes
                sample validation when performed, per date of service), which in CY
                2019 is assigned a rate of $12.60 under the CLFS, and which we will
                prorate to account for two tests per month in the base bundled payment;
                and HCPCS code G0480 (Drug test(s), definitive, utilizing (1) drug
                identification methods able to identify individual drugs and
                distinguish between structural isomers (but not necessarily
                stereoisomers), including, but not limited to gc/ms (any type, single
                or tandem) and lc/ms (any type, single or tandem and excluding
                immunoassays (e.g., ia, eia, elisa, emit, fpia) and enzymatic methods
                (e.g., alcohol dehydrogenase)), (2) stable isotope or other universally
                recognized internal standards in all samples (e.g., to control for
                matrix effects, interferences and variations in signal strength), and
                (3) method or drug-specific calibration and matrix-matched quality
                control material (e.g., to control for instrument variations and mass
                spectral drift); qualitative or quantitative, all sources, includes
                specimen validity testing, per day; 1-7 drug class(es), including
                metabolite(s) if performed), which in CY 2019 is assigned a rate of
                $114.43 under the CLFS, and which we will prorate to account for one
                test per month in the base bundled payment, as discussed previously.
                The sum of these amounts is $161.71.
                    We are also finalizing our proposal to adjust the non-drug
                component rate to account for different administration and dispensing
                costs of the drug that is used in the episode of care (either oral,
                injectable, or implantable). We note that in calculating the proposed
                rates, the TRICARE weekly bundled rate included administration of oral
                drugs, which we then adjusted accordingly for the other bundled
                payments by subtracting the amount for dispensing oral drugs and adding
                a different amount to account for administration of the injectable and
                implantable drugs. We are finalizing the rate we proposed for
                dispensing oral drugs using an approximation of the average dispensing
                fees under state Medicaid programs, which is $10.50, since there is no
                Medicare Part B rate for oral MAT drugs. For the injectable drugs
                (buprenorphine and naltrexone), we proposed to subtract from the non-
                drug component an amount that is comparable to the dispensing fees paid
                by several state Medicaid programs ($10.50) for a week of daily
                dispensing of methadone, and to add the Medicare non-facility rate for
                administration of an injection. This adjustment was necessary to
                account for the fact that the TRICARE rate includes oral dispensing
                fees, whereas these injectable drugs are not oral drugs that are
                dispensed daily. However, because we are adopting a building block
                methodology in final rule to determine the payment rate for the non-
                drug component of the weekly bundles, it is no longer necessary to
                subtract the oral dispensing fee; however, as we proposed, we will
                include the Medicare non-facility rate for administration of an
                injection in our determination of the payment rate for the non-drug
                component for weekly bundles that include injectable drugs. We are
                finalizing the rate we proposed for administration of an injection,
                based on CPT code 96372 (Therapeutic, prophylactic, or diagnostic
                injection (specify substance or drug); subcutaneous or intramuscular)
                as a reference code, is $16.94.
                    For the codes describing the insertion, removal, or insertion and
                removal of the buprenorphine implants, we proposed to adjust the non-
                drug component payment rate to remove the cost of daily administration
                of an oral drug and by adding the Medicare non-facility payment rate
                for the insertion, removal, or insertion and removal of the implants,
                respectively. Again, removal of the cost of daily administration of an
                oral drug is no longer necessary under our building block methodology;
                but, we are finalizing our proposal to include the rates for the
                insertion, removal, or insertion and removal of the buprenorphine
                implants, as applicable. The reference codes, which we proposed and are
                finalizing are: HCPCS codes G0516 (Insertion of non-biodegradable drug
                delivery implants, 4 or more (services for subdermal rod implant)),
                which in CY 2019 is assigned a non-facility rate of $246.15. G0517
                (Removal of non-biodegradable drug delivery implants, 4 or more
                (services for subdermal implants)), which in CY 2019 is assigned a non-
                facility rate of $265.61 under the PFS, and G0518 (Removal with
                reinsertion, non-biodegradable drug delivery implants, 4 or more
                (services for subdermal implants)), which in CY 2019 is assigned a non-
                facility rate of $465.26 under the PFS. Under the building block
                methodology we are adopting in this final rule, the total non-drug
                component payment for the non-drug bundle is $161.71, the total non-
                drug component payment for oral drugs is $172.21, the total non-drug
                component payment for the injectable drugs is $178.65, the total non-
                drug component payment for the buprenorphine implant insertion is
                $407.86, the total non-drug component payment for the buprenorphine
                implant removal is $427.32, and the total non-drug component payment
                for the buprenorphine implant insertion and removal is $626.97. See
                Table 18 for a full listing of the final payment rates that we are
                establishing in this final rule, which reflect the sum of the drug
                component and non-drug component for each bundled payment. We believe
                the rates we are finalizing are reflective of an average case, but we
                recognize that the number of services furnished for patients who have
                stabilized and are in the maintenance phase of treatment, may be
                significantly less. However, we note that while the reference codes
                listed above were considered for the purpose of valuation of the non-
                drug component of the weekly bundled payments, it is not a requirement
                for billing these codes (HCPCS codes G2067-G2075) that all of the
                services described by these reference codes would necessarily be
                furnished during each week that the bundled payment is billed. Rather,
                the threshold to bill for the bundled payment is that at least one
                service in the bundle is furnished during that week, which could be
                administration of the drug, individual therapy, group therapy,
                substance use counseling, or toxicology testing.
                    In response to commenters who stated that the proposed rate for the
                counseling add-on code was too low, we note that we are finalizing a
                rate of $30.94, which is based on the CY 2019 PFS non-facility rate for
                HCPCS code G0396 (Alcohol and/or substance (other than tobacco) abuse
                structured assessment (e.g., audit, dast), and brief intervention 15 to
                30 minutes), when furnished by NPPs, and is higher than the proposed
                amount for this add-on code. Additionally, we believe that the
                availability of this add-on code will allow OTPs to receive
                reimbursement for additional counseling services furnished to patients
                with more needs, thereby accounting for varying levels of severity of
                illness. We will be
                [[Page 62660]]
                monitoring the claims data to ensure that use of this add-on code is
                not being abused.
                i. Medication Not Otherwise Specified
                    In the proposed rule, we stated that we would expect the non-drug
                component for the medication not otherwise specified bundled payment
                (HCPCS code G2075) to be consistent with the pricing methodology for
                the other bundled payments and therefore, to be based on a crosswalk to
                the TRICARE rate, adjusted for any applicable administration and
                dispensing fees. For example, for oral medications, we would use the
                rate for the non-drug services included in the TRICARE methadone
                bundle, based on an assumption that the drug is also being dispensed
                daily. For the injectable medications, we similarly stated that we
                would adjust the TRICARE payment rate for non-drug services using the
                same methodology we proposed for the bundled payments with injectable
                medications (to subtract an amount for daily dispensing and add the
                non-facility Medicare payment rate for administration of the
                injection). For implantable medications, we stated that we would also
                use the same methodology we proposed for the bundled payments with
                implantable medications, with the same crosswalked non-facility
                Medicare payment rates (for insertion, removal, and insertion and
                removal). We solicited comments on how the price of the non-drug
                component of such bundled payments should be determined, in particular
                the dispensing and/or administration fees, including whether the
                methodology we proposed for determining the payment rate for the non-
                drug component of an episode of care that includes a new opioid agonist
                and antagonist medication (which is based on whether the drug is oral,
                injectable, or implantable) would be appropriate to use for these new
                drugs.
                    We did not receive any comments on our proposal relating to pricing
                the non-drug component for medication not otherwise specified bundled
                payments. Consistent with our original proposal, we intend to determine
                the payment for the non-drug component of the medication not otherwise
                specified bundle based on whether the drug is oral, injectable, or
                implantable. However, this payment would be determined using the
                building block payment methodology that we are adopting in this final
                rule to determine the non-drug component of the bundled payments for
                medications that have the same mode of administration.
                (c) Partial Episode of Care
                    For the codes describing partial episodes for methadone and oral
                buprenorphine, we proposed that the payment rates for the non-drug
                component would be calculated by taking one half of the payment rate
                for the non-drug component for the corresponding weekly bundles. We
                chose one half as the best approximation of the median cost of the
                services furnished during a partial episode consistent with our
                proposal to make a partial episode bundled payment when the majority of
                services described in a beneficiary's treatment plan are not furnished
                during a specific episode of care. However, we solicited comment on
                other methods that could be used to calculate these payment rates. We
                proposed that the payment rates for the drug component of these partial
                episode bundles would be calculated by taking one half of the payment
                rate for the drug component of the corresponding weekly bundles.
                    For the codes describing partial episodes for injectable
                buprenorphine and naltrexone, we proposed that the payment rates for
                the drug component would be the same as the payment rate for the drug
                component of the full weekly bundle so that the OTP would be reimbursed
                for the cost of the drug that is given at the start of the episode. For
                the non-drug component, we proposed that the payment rate would be
                calculated as follows: The TRICARE non-drug component payment rate
                ($110.96), adjusted to remove the cost of daily administration of an
                oral drug ($10.50), then divided by two; that amount would be added to
                the fee that Medicare pays for the administration of an injection
                (which is currently $16.94 under the CY 2019 non-facility Medicare
                payment rate for CPT code 96372).
                    For the codes describing partial episodes for the buprenorphine
                implant insertion, removal, and insertion and removal, we proposed that
                the payment rates for the drug component would be the same as the
                payment rate for the corresponding weekly bundle. For the non-drug
                component, we proposed that the payment rate would be calculated as
                follows: The TRICARE non-drug component payment rate ($110.96),
                adjusted to remove the cost of daily administration of an oral drug
                ($10.50), then divided by two; that amount would be added to the
                Medicare non-facility payment rate for the insertion, removal, or
                insertion and removal of the implants, respectively (based on the non-
                facility rates for HCPCS codes G0516, G0517, and G0518, which are
                currently $246.15, $265.61, and $465.26, respectively).
                    For the code describing a non-drug partial episode of care, we
                proposed that the payment rate would be calculated by taking one half
                of the payment rate for the corresponding weekly bundle.
                    We proposed that the payment rate for the code describing partial
                episodes for a medication not otherwise specified would be calculated
                based on whether the medication is oral, injectable or implantable,
                following the methodology described above for the corresponding type of
                partial episode. We solicited comments on how partial episodes of care
                using new drugs with a novel mechanism of action (that is, non-opioid
                agonist and/or antagonist treatment medications) should be priced. For
                example, we could use the same approach described previously for
                pricing new opioid agonist and antagonist medications not otherwise
                specified, which is to follow the methodology based on whether the drug
                is oral, injectable or implantable.
                    We did not receive comments on our proposed methodology for
                determining payment rates for partial episodes. However, as discussed
                above, after consideration of the public comments, we are not
                finalizing our proposal to create partial episodes at this time, and
                thus will not be finalizing our proposed methodology for pricing
                partial episodes.
                BILLING CODE 4120-01-P
                [[Page 62661]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.024
                [[Page 62662]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.025
                BILLING CODE 4120-01-C
                (8) Place of Service (POS) Code for Services Furnished at OTPs
                    In the proposed rule, we explained that we would be creating a new
                POS code specific to OTPs since there are no existing POS codes that
                specifically describe OTPs. We indicated that claims for OTP services
                would include this place of service code. We also noted that POS codes
                are available for use by all payers. We did not propose to make any
                differential payment based on the use of this new POS code.
                    The following is a summary of the comments we received regarding
                the discussion of creating a new POS and our responses.
                    Comment: Several commenters supported the plan to create a new POS
                code that would specifically describe OTPs. A few commenters stated
                that if non-OTP pharmacies were to dispense MAT drugs covered by an OTP
                bundle, it is not clear how the OTP POS code will be transmitted to
                Part D plans or pharmacies so that they will know whether an enrollee
                is also enrolled in an OTP. Another commenter stated that while POS
                codes currently distinguish inpatient from outpatient OUD treatment,
                they do not distinguish between a Medicare-enrolled OTP and a non-
                Medicare-enrolled OTP and recommended that CMS should consider multiple
                value sets for POS codes to help retail pharmacies dispense
                prescriptions and process claims appropriately.
                    Response: We have created a new place of service code, which will
                be described as Place of Service code 58 (Non-residential Opioid
                Treatment Facility--a location that provides treatment for OUD on an
                ambulatory basis. Services include methadone and other forms of MAT).
                We expect that POS code 58 will be noted on claims
                [[Page 62663]]
                submitted for the HCPCS G codes describing OTP services. Additionally,
                we note that the G codes describing the OTP bundled payments and add-on
                codes can only be billed by OTPs and cannot be billed by other
                providers. We note that POS codes are not specific to Medicare use and
                may be used by other payers.
                    In response to the comments about non-OTP pharmacies dispensing MAT
                drugs included in an OTP bundle, we encourage pharmacies and
                prescribing OTPs be in close communication in order to ensure proper
                billing procedures are followed and to prevent duplicative payments.
                The presence of POS code 58 on retail pharmacy claims will not mean
                that the pharmacy should process MAT claims any differently than they
                do now. We appreciate the suggestion to create multiple value sets for
                POS codes, and will take that under consideration.
                c. Duplicative Payments Under Parts B or D
                    Section 1834(w)(1) of the Act, added by section 2005(c) of the
                SUPPORT Act, requires the Secretary to ensure, as determined
                appropriate by the Secretary, that no duplicative payments are made
                under Part B or Part D for items and services furnished by an OTP. In
                the proposed rule, we noted that many of the individual items or
                services provided by OTPs that would be included in the bundled payment
                rates under the proposed policies may also be appropriately available
                to beneficiaries through other Medicare benefits. Although we
                recognized the potential for significant program integrity concerns
                when similar items or services are payable under separate Medicare
                benefits, we also stated that we believe it is important that any
                efforts to prevent duplicative payments not inadvertently restrict
                Medicare beneficiaries' access to other Medicare benefits even for the
                time period they are being treated by an OTP. For example, a
                beneficiary receiving counseling or therapy as part of an OTP bundle of
                services may also be receiving medically reasonable and necessary
                counseling or therapy as part of a physician's service during the same
                time period. Similarly, there could be circumstances where Medicare
                beneficiaries with OUD could receive treatment and/or medication from
                non-OTP entities that would not result in duplicative payments,
                presuming that both the OTP and the other entity appropriately
                furnished separate medically-necessary services or items. Consequently,
                we explained that we do not believe that provision of the same kinds of
                services by both an OTP and a separate provider or supplier would
                itself constitute a duplicative payment.
                    We explained our belief that duplicative payments would result from
                the submission of claims to Medicare leading to payment for drugs
                furnished to a Medicare beneficiary and the associated dispensing fees
                on a certain date of service to both an OTP and another provider or
                supplier under a different benefit. In these circumstances, we would
                consider only one of the claims to be paid for appropriately.
                Accordingly, for purposes of implementing section 1834(w)(1) of the
                Act, we proposed to consider payment for medications delivered,
                administered or dispensed to the beneficiary as part of the OTP bundled
                payment to be a duplicative payment if delivery, administration or
                dispensing of the same medications was also separately paid under
                Medicare Parts B or D. We proposed to codify this policy at Sec.
                410.67(d)(4). We acknowledged that some OTPs may negotiate arrangements
                whereby community pharmacies supply MAT-related medications to OTPs.
                However, we stated that if the OTP provides medically-necessary MAT-
                related medications as part of an episode of care, we would expect the
                OTP to take measures to ensure that there is no claim for payment for
                these drugs other than as part of the OTP bundled payment. For example,
                the MAT drugs billed by an OTP as part of a bundled payment should not
                be reported to or paid under a Part D plan. We stated that we expect
                that OTPs will take reasonable steps to ensure that the items and
                services furnished under their care are not reported or billed under a
                different Medicare benefit. We also noted that CMS intends to monitor
                for duplicative payments, and would take appropriate action as needed
                when such duplicative payments are identified. Therefore, we proposed
                that in cases where a payment for drugs used as part of an OTP's
                treatment plan is identified as being a duplicative payment because the
                same costs were paid under a different Medicare benefit, CMS will
                generally recoup the duplicative payment made to the OTP as the OTP
                would be in the best position to know whether or not the drug that is
                included as part of the beneficiary's treatment plan is furnished by
                the OTP or by another provider or supplier given that the OTP is
                responsible for managing the beneficiary's overall OUD treatment. We
                proposed to codify this policy at Sec.  410.67(d)(4). We noted that
                this general approach would not preclude CMS or other auditors from
                conducting appropriate oversight of duplicative payments made to the
                other provider or suppliers, particularly in cases of fraud and/or
                abuse.
                    We received a few comments on our proposed policy to address
                duplicative payments. The following is a summary of the comments we
                received and our responses.
                    Comment: A few commenters supported the proposal that the OTP
                should be accountable for ensuring duplicative payments are not made on
                the basis that OTPs are in the best position to know whether a drug
                included in the patient's treatment plan is furnished by the OTP.
                    Response: We thank the commenters for their feedback and support.
                    Comment: One commenter stated that the new Medicare bundled
                payments to OTPs should not impact payment for MAT prescriptions
                rightfully transmitted to a retail pharmacy unless the prescription is
                from an OTP. The commenter stated that having to determine whether a
                MAT drug presented to a retail pharmacy should be covered under the new
                Part B OTP bundle or Part D could introduce a delay in access to
                treatment. The commenter stated that retail pharmacies should continue
                to process any MAT prescription under Part D, as they do today. The
                commenter also stated that prescribers who administer implantable or
                injectable MAT drugs outside of a SAMHSA-certified OTP would continue
                to bill these drugs to Part B. Additionally, the commenter questioned
                if the Medicare bundled payments to OTPs will include MAT drugs that
                are prescribed within an OTP by a licensed prescriber, but dispensed
                outside of it.
                    Response: With regard to the commenter's question concerning MAT
                drugs prescribed within an OTP but dispensed outside of it, there is no
                issue of duplicative payment if the OTP has an arrangement with the
                pharmacy whereby CMS pays the OTP a bundled payment rate and the OTP
                reimburses the pharmacy through an independent arrangement (in which
                case the pharmacy would not bill the Part D plan, as it would be
                reimbursed by the OTP). However, if such an arrangement does not exist,
                and the pharmacy intends to submit a Part D claim, then the OTP should
                not bill for an episode of care that includes a drug component but
                instead should bill for a non-drug episode of care (HCPCS code G2074).
                Similarly, we note that if the drug administration for a Part B MAT
                drug occurs outside the OTP and the OTP is not also billing for a
                weekly bundle that includes that Part B drug, then the administering
                provider can bill Part B.
                [[Page 62664]]
                    Comment: One commenter stated that while they agree with our
                proposal to recoup duplicative payments from OTPs, CMS should monitor
                for any unintended impacts to access or other challenges that may
                result. The commenter stated that CMS must not create a situation in
                which beneficiaries cannot access needed care because they are
                receiving OUD treatment through an OTP bundle.
                    Response: We have explicitly acknowledged that we do not believe a
                beneficiary receiving the same kinds of services from both an OTP and
                another provider or supplier would necessarily constitute a duplicative
                payment. We reiterate, however, that we do have an expectation that
                OTPs will take reasonable steps to ensure that the items and services
                furnished under their care are not reported or billed under a different
                Medicare benefit. For example, OTPs could actively coordinate care and
                facilitate information exchange between other prescribers, dispensers
                and plans who prescribe, administer, dispense, or pay for medications
                for OUD treatment. We also note that OTPs and other health care
                providers must comply with all applicable laws and regulations, such as
                the Health Insurance Portability and Accountability Act and the
                Substance Abuse Confidentiality Regulations (42 CFR part 2). We intend
                to conduct monitoring to ensure that our policies regarding duplicative
                payment do not have any such unintended consequences as described by
                the commenter.
                    Comment: A few commenters stated that drugs dispensed outside the
                OTP should not be included in the OTP bundle. One commenter stated that
                community pharmacies currently face challenges in knowing whether a
                prescription is from an inpatient OTP or whether the inpatient OTP is
                prescribing outpatient therapy for a patient who is being discharged.
                The commenter stated that the best way to avoid duplicate payments from
                occurring is to limit the OTP bundled payment to drugs dispensed by an
                OTP facility; similarly the commenter stated that if take-home
                medications are included in the OTP bundle, they should also be
                dispensed by the OTP.
                    Response: We disagree that only medications provided at the OTP
                should be included in the bundled payment. As indicated above, we are
                aware that some OTPs have arrangements with pharmacies whereby the OTP
                reimburses the pharmacy through an independent arrangement. In this
                case, it is appropriate for the OTP to bill for the weekly bundled
                payment that corresponds to the medication provided to the beneficiary.
                We also note that if questions arise regarding the purpose of the
                prescription, as described by the commenter, the pharmacy should
                contact the prescribing OTP for any necessary clarifications.
                    Comment: A few commenters stated that more information is needed to
                better understand how CMS will monitor and protect against duplicative
                billing/payment. The commenters recommended that CMS update the
                guidance in the Medicare Program Integrity Manual to better outline the
                process through which duplicative payments will be monitored and
                corrected.
                    Response: We will consider issuing further guidance either through
                future rulemaking or subregulatory guidance, as suggested.
                    Comment: One commenter disagreed that OTPs should be financially
                accountable for duplicative payments. The commenter stated that OTPs
                may not have access to prescribing information for every physician or
                clinician the beneficiary sees outside of the OTP, nor do reporting
                mechanisms exist for this information in order for OTPs to quickly and
                efficiently review prior to engaging patients in time-sensitive
                deployment of OUD treatment.
                    Response: We reiterate that we have explicitly acknowledged that we
                do not believe that payments for the same kinds of services from both
                an OTP and a separate provider or supplier would necessarily result in
                a duplicative payment. We also emphasize that we have narrowly defined
                duplicative payment to involve only those circumstances where
                medications that are delivered, administered or dispensed to a
                beneficiary are paid as part of the OTP bundled payment, and where the
                delivery, administration or dispensing of the same medications (that
                is, same drug, dosage and formulation) is also separately paid under
                Medicare Part B or Part D for the same beneficiary with the same date
                of service. As noted earlier, we do not intend to prevent the
                appropriate billing under Medicare Part B or Part D for individual
                items or services that could be provided by OTPs as part of an episode
                of care and included in the bundled payment rate, but that may also be
                appropriately available to beneficiaries through other Medicare
                benefits.
                    Comment: One commenter supported the proposal to hold OTPs
                accountable for duplicative payments, but stated that CMS should issue
                a non-enforcement or hold harmless grace period for CY 2020 for audits
                and other consequences such as Star Ratings related to the new OUD
                treatment services benefit.
                    Response: We appreciate the feedback and note that section
                1834(w)(1) of the Act expressly requires that we take steps to ensure
                that no duplicative payments are made. Moreover, as explained above, we
                have narrowly defined duplicative payment, so we do not believe that a
                grace period would be necessary for CY 2020.
                    After consideration of the public comments, we clarifying that our
                final policy on duplicative payments refers to payment for the same
                medication for the same beneficiary on the same date of service. Thus
                we are finalizing our proposal that in cases where a payment for drugs
                used as part of an OTP's treatment plan is identified as being a
                duplicative payment because a claim for the same medications for the
                same beneficiary on the same date of service was paid under a different
                Medicare benefit, CMS will generally recoup the duplicative payment
                made to the OTP. We have updated the text at Sec.  410.67(d)(5) to
                reflect this clarification.
                d. Cost Sharing
                    Section 2005(c) of the SUPPORT Act amended section 1833(a)(1) of
                the Act, relating to payment of Part B services, by adding a new
                subparagraph (CC), which specifies with respect to OUD treatment
                services furnished by an OTP during an episode of care that the amount
                paid shall be equal to the amount payable under section 1834(w) of the
                Act less any copayment required as specified by the Secretary. Section
                1834(w) of the Act, which was also added by section 2005(c) of the
                SUPPORT Act, requires that the Secretary pay an amount that is equal to
                100 percent of a bundled payment under this part for OUD treatment
                services. Given these two provisions, we believe that there is
                flexibility for CMS to set the copayment amount for OTP services either
                at zero or at an amount above zero. Therefore, we proposed to set the
                copayment at zero for a time-limited duration (for example, for the
                duration of the national opioid crisis), as we believe this would
                minimize barriers to patient access to OUD treatment services. Setting
                the copayment at zero would also ensure OTP providers receive the full
                Medicare payment amount for Medicare beneficiaries if secondary payers
                are not available or do not pay the copayment, especially for those
                dually eligible for Medicare and Medicaid.\80\ We solicited
                [[Page 62665]]
                public comment on our proposal to set the copayment at zero for a time-
                limited duration, such as for the duration of the national opioid
                crisis, and any other metrics CMS might consider using to determine
                when to start requiring a copayment. In developing our approach, we
                also considered other alternatives, such as setting the copayment at a
                fixed fee calculated based on 20 percent of the payment rate for the
                bundle, consistent with the standard copayment requirement for other
                Part B services, or applying a flat dollar copayment amount similar to
                TRICARE's copayment; however, we recognized that setting the copayment
                for OUD services at an amount greater than zero could create a barrier
                to access to treatment for many beneficiaries. We proposed to codify
                the proposed copayment amount of zero at Sec.  410.67(e). We solicited
                feedback on our proposal to set the copayment amount for OTP services
                at zero, and on the alternatives considered, including whether we
                should consider any of these alternatives for CY 2020 or future years.
                ---------------------------------------------------------------------------
                    \80\ For those dually eligible individuals in the Qualified
                Medicare Beneficiary program (7.7 million of the 12 million dually
                eligible individuals in 2017), state Medicaid programs cover the
                Medicare Part A and Part B deductible and coinsurance. However,
                section 4714 of the Balanced Budget Act of 1997 (Pub. L. 105-33)
                provides discretion for states to pay Medicare cost-sharing only if
                the Medicaid payment rate for the service is above the Medicare paid
                amount for the service. Since most states opt for this discretion,
                and most Medicaid rates are lower than Medicare's, states often do
                not pay the provider for the Medicare cost-sharing amount. Providers
                are further prohibited from collecting the Medicare cost-sharing
                amount from the beneficiary, effectively having to take a discount
                compared to the amount received for other Medicare beneficiaries.
                ---------------------------------------------------------------------------
                    Separately, we noted that the Part B deductible would apply for OUD
                treatment services, as mandated for all Part B services by section
                1833(b) of the Act.
                    We received public comments on the proposals related to cost
                sharing for the bundled payments for OUD treatment services. The
                following is a summary of the comments we received and our responses.
                    Comment: Many commenters supported the proposal to set the
                copayment at zero for a time limited duration. A few commenters
                encouraged CMS to consider setting the copayment at zero permanently,
                noting that individuals who require the services of an OTP will have
                difficulty making copayments for a variety of reasons, regardless of
                whether there is an opioid epidemic across the nation. One commenter
                noted that if a patient received OUD treatment services outside of an
                OTP, they would pay 20 percent Part B coinsurance under Medicare at
                other health care settings or Part D plan cost sharing for any
                pharmacy-dispensed prescription drugs which may disadvantage other
                established Medicare provider types. This commenter also noted that
                OTPs may not be available to patients in all geographic localities,
                which would seem to be unfair.
                    Response: We appreciate the support for our proposal. After
                consideration of the public comments, we are finalizing our proposal to
                set the copayment at zero for a time limited duration, as we believe
                this would minimize barriers to patient access to OUD treatment
                services. Setting the copayment at zero also ensures OTPs receive the
                full Medicare payment amount for Medicare beneficiaries if secondary
                payers are not available or do not pay the copayment, especially for
                those beneficiaries who are dually eligible for Medicare and Medicaid.
                However, as we explained in the proposed rule, we are interested in
                setting the copayment at zero for a time limited duration (for example,
                until such time as the Secretary does not renew the national public
                health emergency declaration for the continued consequence of the
                opioid crisis affecting our nation), and intend to address the
                copayment in future rulemaking at such a time we deem appropriate.
                Although we appreciate the concern that OUD treatment services
                furnished in other settings require beneficiary cost sharing, we
                believe it is important, especially in light of the opioid epidemic, to
                minimize barriers to patient access to OUD treatment services in such
                instances that we are able to and note that section 2005 of the SUPPORT
                Act does not provide authority to waive cost sharing for OUD treatment
                services furnished in other settings.
                    Comment: One commenter requested that OTPs be allowed to receive
                Medicare bad debt payments for any uncollected Part B deductible
                payments, noting that OTP providers are unlikely to be successful in
                collecting deductibles for many patients in this population. Another
                commenter expressed concern that the application of the Part B
                deductible to OUD treatment services furnished by OTPs might
                particularly affect dually eligible beneficiaries currently receiving
                OTP care as they are likely to visit an OTP provider in January, before
                they hit their annual Part B deductible. This could put them in the
                position of owing over $100 in January.
                    Response: We note that bad debts arising from covered services paid
                under a reasonable charge-based methodology or a fee schedule are not
                reimbursable under the Medicare program (42 CFR 413.89(i)).
                Additionally, we note that the majority of dually eligible individuals
                are Qualified Medicare Beneficiaries (QMBs), a program in which
                Medicaid covers the Medicare Part A (if any) and Part B premiums and
                other Medicare cost-sharing. States may pay for deductibles,
                coinsurance, and copayments for Medicare services furnished by Medicare
                providers to QMBs to the extent consistent with the Medicaid State
                Plan. States have the option to reduce or eliminate the state's
                Medicare cost sharing payments by adopting policies that limit payment
                to the lesser of (a) the Medicare cost sharing amount, or (b) the
                difference between the Medicare payment and the Medicaid rate for the
                service, consistent with the methodology identified in the state plan.
                When Medicaid rates are lower this can result in the provider receiving
                reduced or even no payment for the deductible. Regardless of the amount
                paid by the state for the deductible, coinsurance, and copayments,
                sections 1848(g)(3) and 1866(a)(1)(A) of the Act prohibit Medicare
                providers from billing QMBs for Medicare Parts A and B cost sharing
                amounts. States may also choose to cover Medicare cost-sharing for
                certain other full-benefit dually eligible individuals.
                    As discussed in more detail below, once a provider is enrolled in
                Medicare, Medicare will crossover the deductible portion of the claim
                to state Medicaid agencies, and the state will adjudicate the claim.
                However, as noted above, states often use different HCPCS billing codes
                for OTP services than Medicare does; in these cases, we note that the
                state's claims processing system may reject the claim and will notify
                the provider, who can re-code and resubmit the claim directly to the
                state.
                    In summary, we are finalizing our proposal to set the copayment for
                OUD treatment services furnished by OTPs at zero for a time limited
                duration, as we believe this would minimize barriers to patient access
                to OUD treatment services. We are codifying this beneficiary cost-
                sharing amount at Sec.  410.67(e).
                4. Adjustments to Bundled Payment Rates for OUD Treatment Services
                    The costs of providing OUD treatment services will likely vary over
                time and depending on the geographic location where the services are
                furnished. Below we discuss our proposed adjustments to the bundled
                payment rates to account for these factors.
                [[Page 62666]]
                a. Locality Adjustment
                    Section 1834(w)(2) of the Act, as added by section 2005(c) of the
                SUPPORT Act provides that the Secretary may implement the bundled
                payment for OUD treatment services furnished by OTPs through one or
                more bundles based on the type of medications, the frequency of
                services, the scope of services furnished, characteristics of the
                individuals furnished such services, or other factors as the Secretary
                determines appropriate. The cost for the provision of OUD treatment
                services, like many other healthcare services covered by Medicare, will
                likely vary across the country based upon the differing cost in a given
                geographic locality. To account for such geographic cost differences in
                the provision of services, in a number of payment systems, Medicare
                routinely applies geographic locality adjustments to the payment rates
                for particular services. Because we believe OUD treatment services
                furnished by OTPs will also be subject to varying cost based upon the
                geographic locality where the services are furnished, in the proposed
                rule we proposed to apply a geographic locality adjustment to the
                bundled payment rate for OUD treatment services. We discussed our
                proposed approach with respect to both the drug component (which
                reflects payment for the drug) and the non-drug component (which
                reflects payment for all other services furnished to the beneficiary by
                the OTP, such as drug administration, counseling, toxicology testing,
                etc.) of the bundled payment.
                (1) Drug Component
                    Because our proposed approaches for pricing the MAT drugs included
                in the bundles all reflected national pricing, and because there is no
                GAF applied to the payment of Part B drugs under the ASP methodology,
                we did not believe that it would be necessary to adjust the drug
                component of the bundled payment rates for OTP services based upon
                geographic locality. Therefore, we proposed not to apply a geographic
                locality adjustment to the drug component of the bundled payment rate
                for OTP services. We did not receive any comments on this proposal and
                are finalizing as proposed not to make any geographic adjustment to the
                drug component of the bundled payment rates.
                (2) Non-Drug Component
                    Unlike the national pricing of drugs, the costs for the services
                included in the non-drug component of the OTP bundled payment for OUD
                treatment services are not constant across all geographic localities.
                For example, OTPs' costs for rent or employee wages could vary
                significantly across different localities and could potentially result
                in disparate costs for the services included in the non-drug component
                of OUD treatment services. Because the costs of furnishing the services
                included in the non-drug component of the OTP bundled payment for OUD
                treatment services will vary based upon the geographic locality in
                which the services are provided, in the proposed rule we stated that we
                believed it would be appropriate to apply a geographic locality
                adjustment to the non-drug component of the bundled payments. We
                believed that the geographic variation in the cost of the non-drug
                services provided by OTPs would be similar to the geographic variation
                in the cost of services furnished in physician offices. Therefore, to
                account for the differential costs of OUD treatment services across the
                country, we proposed to adjust the non-drug component of the bundled
                payment rates for OUD treatment services using an approach similar to
                the established methodology used to geographically adjust payments
                under the PFS based upon the location where the service is furnished.
                The PFS currently provides for an adjustment to the payment for PFS
                services based upon the fee schedule area in which the service is
                provided through the use of Geographic Practice Cost Indices (GPCIs),
                which measure the relative cost differences among localities compared
                to the national average for each of the three fee schedule components
                (work, PE, and malpractice).
                    Although we proposed to adjust the non-drug component of the
                payments for OUD treatment services using an approach similar to the
                established methodology used to adjust PFS payment for geographic
                locality, because GPCIs provide for the application of geographic
                locality adjustments to the three distinct components of PFS services,
                and we proposed the OTP bundled payment as a flat rate payment for all
                OUD treatment services furnished during an episode of care, we
                explained that a single factor would be required to apply the
                geographic locality adjustment to the non-drug component of the OTP
                bundled payment rate. Therefore, to apply a geographic locality
                adjustment to the non-drug component of the OTP bundled payment for OUD
                treatment services through a single factor, we proposed to use the
                Geographic Adjustment Factor (GAF) at Sec.  414.26. Specifically, we
                proposed to use the GAF to adjust the payment for the non-drug
                component of the OTP bundled payment to reflect the costs of furnishing
                the non-drug component of OUD treatment services in each of the PFS fee
                schedule areas. The GAF is calculated using the GPCIs under the PFS,
                and is used to account for cost differences in furnishing physicians'
                services in differing geographic localities. The GAF is calculated for
                each fee schedule area as the weighted composite of all three GPCIs
                (work, PE, and malpractice) for that given locality using the national
                GPCI cost share weights. In developing the proposal, we also considered
                geographically adjusting the payment for the non-drug component of the
                OTP bundled payment using only the PE GPCI value for each fee schedule
                area. However, because the non-drug component of OUD treatment services
                is comprised of work, PE, and malpractice expenses, we proposed using
                the GAF as we believe the weighted composite of all three GPCIs
                reflected in the GAF would be the more appropriate GAF to reflect
                geographic variations in the cost to OTPs of furnishing OUD treatment
                services.
                    The GAF, which is determined under Sec.  414.26, is discussed
                earlier in section II.D.1. of this final rule and the specific GAF
                values for each payment locality are posted in Addendum D to this final
                rule. In developing the proposed geographic locality adjustment for the
                non-drug component of the OUD treatment services payment rate, we also
                considered other potential locality adjustments, such as the Inpatient
                Prospective Payment System (IPPS) hospital wage index. However, we
                proposed using the GAF as we believed the services provided in an OTP
                more closely resemble the services provided at a physician office than
                the services provided in other settings, such as inpatient hospitals.
                We proposed to codify using the GAF to adjust the non-drug component of
                the OTP bundled payments to reflect the cost differences in furnishing
                these services in differing geographic localities at Sec.
                410.67(d)(3)(ii). We solicited public comment on the proposal to adjust
                the non-drug component of the OTP bundled payments for geographic
                variations in the costs of furnishing OUD treatment services using the
                GAF. We also solicited comments on any factors, other than the GAF,
                that could be used to make this payment adjustment.
                    Additionally, we noted that the majority of OTPs operate in urban
                localities. In light of this fact, we
                [[Page 62667]]
                explained that we were interested in receiving information on whether
                rural areas have appropriate access to treatment for OUD. We were
                particularly interested in any potential limitations on access to care
                for OUD in rural areas and whether there are additional adjustments to
                the proposed bundled payments that should be made to account for the
                costs incurred by OTPs in furnishing OUD treatment services in rural
                areas. We solicited comment for future consideration on this issue and
                potential solutions we could consider adopting to address this
                potential issue through future rulemaking.
                    We received a few comments on the proposed locality adjustment. The
                following is a summary of the comments we received and our responses.
                    Comment: One commenter supported using the GAF to geographically
                adjust the non-drug component of the bundled payment.
                    Response: We thank the commenter for their support and feedback.
                    Comment: One commenter stated that CMS should create a 17 percent
                rural add-on payment to be applied to the bundled payment rate in low-
                population density areas where it is difficult to find doctors, nurses,
                and counselors to treat OUD patients. The commenter noted that Medicare
                provides a 17 percent rural add-on for inpatient psychiatric facilities
                which often treat substance abuse cases.
                    Response: We appreciate the suggestion and may consider whether to
                propose a rural add-on payment in future rulemaking. In the interim, we
                note that the current Medicare PFS locality structure contains 34
                states with a statewide payment locality, which means that, in these
                states, the geographic adjustment is the same in all areas, whether
                urban or rural, thus reducing rural/urban payment differentials within
                a state. We intend to monitor this issue, and as previously stated, may
                revisit the issue of a rural add-on payment in the future.
                    After consideration of the public comments, we are finalizing our
                proposal to adjust the non-drug component of the OTP bundled payments
                using the GAF in Sec.  410.67(d)(4)(ii). Additionally, although we did
                not explicitly address the application of a geographic adjustment in
                the context of the add-on payment adjustments for non-drug services in
                the proposed rule, we believe that the same logic regarding the
                differential costs for those services would apply and should be
                recognized. As such, we are also finalizing that the add-on payment
                adjustments for non-drug services will be geographically adjusted as
                described above.
                b. Annual Update
                    Section 1834(w)(3) of the Act, as added by section 2005(c) of the
                SUPPORT Act, requires that the Secretary provide an update each year to
                the OTP bundled payment rates. To fulfill this statutory requirement,
                we proposed to apply a blended annual update, comprised of distinct
                updates for the drug and non-drug components of the bundled payment
                rates, to account for the differing rate of growth in the prices of
                drugs relative to other services. We proposed that this blended annual
                update for the OTP bundled payment rates would first apply for
                determining the CY 2021 OTP bundled payment rates. The specific details
                of the proposed updates for the drug and non-drug components
                respectively are discussed in this section.
                (1) Drug Component
                    As stated above, we proposed to establish the pricing of the drug
                component of the OTP bundled payment rates for OUD treatment services
                based on CMS pricing mechanisms currently in place. To recognize the
                potential change in costs of the drugs used in MAT from year to year
                and to fulfill the requirement to provide an annual update to the OTP
                bundled payment rates, we proposed to update the payment for the drug
                component based upon the changes in drug costs reported under the
                pricing mechanism used to establish the pricing of the drug component
                of the applicable bundled payment rate, as discussed earlier. For
                example, if we were to price the drug component of the bundled payment
                rate for episodes of care using ASP data, the pricing of the drug
                component for these OTP bundled payments would be updated using the
                most recently available ASP data at the time of ratesetting for the
                applicable calendar year. In the proposed rule, we also discussed a
                number of alternative data sources that could be used to price oral
                drugs in the drug component of OTP bundled payments in cases when we do
                not receive manufacturer-submitted ASP pricing data. As an example, if
                we were to use NADAC data, as discussed as one of the alternatives, to
                determine the payment for the drug component of the bundled payment for
                oral drugs in cases when we do not have manufacturer-submitted ASP
                pricing data, this payment rate would be updated using the most
                recently available NADAC data at the time of ratesetting for the
                applicable calendar year.
                    In developing the proposal to annually update the pricing of the
                drug component of the OUD treatment services payment rate, we also
                considered other methodologies, including applying a single uniform
                update factor to the drug and non-drug components of the proposed
                payment rates. We ultimately determined not to propose the use of a
                single uniform update factor, because we believed that it was important
                to apply an annual update to the payment rates that recognizes the
                differing rate of growth of drug costs compared to the rate of growth
                in the cost of the other services. In addition, we also 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). The PPI for chemicals and allied products,
                analgesics is a subset of the PPI produced by the Bureau of Labor
                Statistics (BLS), which measures the average change over time in the
                selling prices received by domestic producers for their output.
                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 our proposed
                approach because we believed the proposed approach would update the
                pricing of the drug component of the OUD treatment services payment
                rate in the manner that would be most familiar to stakeholders. We
                solicited public comment on the proposed approach to updating the drug
                component of the bundled payment rates. We also solicited comment on
                possible alternate methodologies for updating the drug component of the
                payment rate for OUD treatment services, such as use of the PPI for
                chemicals and allied products, analgesics.
                    We did not receive any comments on the proposed approach to update
                the drug component of the bundled payment rates, and are finalizing our
                proposal to use the most recently available data from the applicable
                pricing mechanism finalized for drug pricing, as described above, to
                annually update the drug component of the bundled payment. We are
                codifying this policy at Sec.  410.67(d)(2)(i), which provides that the
                payment for the drug component of episodes of care will be determined
                using the most recent data available at the time of ratesetting for the
                applicable calendar year.
                [[Page 62668]]
                (2) Non-Drug Component
                    To account for the potential changing costs of the services
                included in the non-drug component of the bundled payment rates for OUD
                treatment services, we proposed to update the non-drug component of the
                bundled payment for OUD treatment services based upon the Medicare
                Economic Index (MEI). The MEI is defined in section 1842(i)(3) of the
                Act and the methodology for computing the MEI is described in Sec.
                405.504(d). The MEI is used to update the payment rates for physician
                services under section 1842(b)(3) of the Act, which 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 a higher level is justified by year-to-year economic changes. The
                MEI is a fixed-weight input price index that reflects the physicians'
                own time and the physicians' PEs, with an adjustment for the change in
                economy-wide, private nonfarm business multifactor productivity. The
                method for calculating the MEI was last revised in the CY 2014 PFS
                final rule with comment period (78 FR 74264). In developing the
                proposed update factor for the non-drug component of the OUD treatment
                services payment rate, we also considered other potential update
                factors, such as the BLS Consumer Price Index for All Items for Urban
                Consumers (CPI-U) (Bureau of Labor Statistics #CUUR0000SA0 (https://www.bls.gov/cpi/data.htm) and the IPPS hospital market basket reduced
                by the multifactor productivity adjustment. The 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 OTPs 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 non-drug component of the
                OTP bundled payments.
                    Similarly, we believed the MEI would be more appropriate than the
                IPPS market basket to update the non-drug component of the bundled
                payment rates as the services provided by an OTP more closely resemble
                the services provided at a physician office than the services provided
                by an inpatient hospital. Accordingly, we proposed to update the
                payment amount for the non-drug component of each of the bundled
                payment rates for OUD treatment services furnished by OTPs based upon
                the most recently available historical annual growth in the MEI
                available at the time of rulemaking. We proposed to codify this
                proposal at Sec.  410.67(d)(3)(iii).
                    We received one comment on the annual update for the non-drug
                component of the bundled payment rate. The following is a summary of
                the comment we received and our response.
                    Comment: One commenter disagreed with using the MEI to increase the
                non-drug component payment and stated that the MEI focuses more
                narrowly on physician practices. The commenter stated that an OTP's
                cost structures are more similar to hospital outpatient departments
                than physician offices. The commenter stated that over time, updating
                rates by the MEI, which closely mirrors general inflation, will create
                access to care issues as federal and state mandated OTP costs grow
                faster than Medicare reimbursements. The commenter also stated that
                TRICARE utilizes the IPPS annual update factor and if CMS' goal is to
                align payment with the TRICARE model, it should act consistently and
                also adopt its annual adjustment policy.
                    Response: We clarify that CMS' goal is not to align payment with
                the TRICARE model. As indicated above, section 1834(w)(2) of the Act
                provides that the Secretary may consider the rates paid to OTPs for
                comparable services under Medicaid or under TRICARE. As we discussed in
                the CY 2020 PFS proposed rule, we considered payments for those
                comparable services in the development of our payment rates. However,
                we note that we also solicited comment on the scope of private payer
                OTP coverage and the payment rates private payers have established for
                OTPs furnishing comparable OUD treatment services for consideration.
                    We appreciate the commenter's concern about using the MEI to update
                the non-drug component of the OTP bundled payment rate. Ideally, we
                would develop a market basket that reflects the detailed cost
                structures of OTP facilities; however, these data are not currently
                available. Therefore, we have to use a price index that best
                approximates the cost of the medical services being provided by the OTP
                facilities. Although TRICARE uses the IPPS annual update factor, we
                believe the MEI is a more appropriate index to use to update the non-
                drug component of the OTP bundled payment rate based on both conceptual
                and compositional reasons.
                    From a conceptual standpoint, we believe physicians' services
                furnished in the office setting more closely align to the OUD treatment
                services furnished by OTPs as they both encompass minimally invasive
                medical care such as assessment, counseling, and administering of
                medications. The MEI measures the market price changes in the inputs
                used to furnish physicians' services, and represents both the medical
                and non-medical costs associated with providing this care. In contrast,
                hospitals engage in complex inpatient and outpatient medical services,
                such as surgical procedures and emergency room trauma, which are
                significantly different to the services furnished in OTP facilities.
                The IPPS market basket reflects these complex services and the non-
                medical costs associated with managing these large facilities, such as
                non-medical labor-related services (including but not limited to legal,
                accounting, financial, and installation and maintenance repair
                services), which account for almost 25 percent of the IPPS market
                basket.
                    From a compositional standpoint, the MEI more closely aligns with
                the services associated with the OTP payment system. In particular, the
                MEI does not reflect drug costs (which will be updated separately for
                OTPs, as discussed previously) as these costs are not reimbursed under
                the Medicare PFS, for which the MEI was originally developed. The IPPS
                market basket, however, is an operating market basket that reflects
                drug costs because these costs are included in the IPPS operating base
                payment rate. Additionally, the MEI includes PE associated with all
                operations, including any capital or leasing costs. The IPPS market
                basket, on the other hand, excludes capital costs because under the
                IPPS, capital costs are reimbursed separately and the IPPS capital
                payment rates are updated using the IPPS capital market basket, which
                reflects the complex capital acquisition and financing methods of IPPS
                hospitals. Finally, the MEI reflects an adjustment for expected
                productivity improvements associated with the provision of care (the
                MEI uses the change in economy-wide private non-farm business
                multifactor productivity), which, given the similarity in the nature of
                services furnished in the physician office and OTP settings, OTPs would
                also be anticipated to be able to achieve. The IPPS market basket does
                not include a productivity adjustment as that adjustment is applied
                separately as part of the payment rate update. These compositional
                differences account for many of the differences between the growth
                rates of the MEI and the IPPS market basket that the commenter
                identified as a concern. Because the
                [[Page 62669]]
                differences in growth rates between the IPPS market basket and the MEI
                are due to these compositional differences, we disagree with the
                commenter that there is a concern with using the MEI to update the non-
                drug component of the bundled payment rates. That is, we believe the
                MEI is an appropriate price index to serve as a proxy for changes in
                market costs associated with providing OTP services, as it reflects
                both the medical and non-medical costs of providing noninvasive medical
                care in a non-inpatient facility.
                    After consideration of the public comments, we are finalizing the
                proposal to update the non-drug component of the bundled payment for
                OUD treatment services based upon the MEI. These policies are codified
                in Sec.  410.67(d)(4)(iii). Additionally, although we did not
                explicitly address the application of the annual update to the add-on
                payment adjustments for non-drug services in the proposed rule, we
                believe that the same logic regarding the potential changing costs of
                the services included in the non-drug component of the bundled payment
                rates is applicable. As such, we are finalizing that the add-on payment
                adjustments for non-drug services will be subject to the annual update
                as described above.
                    In addition to comments on our proposals and the related issues on
                which we specifically requested public input, we received a number of
                other public comments related to our implementation of this new
                Medicare benefit for OUD treatment services furnished in an OTP.
                Several comments focused on various aspects of how the OTP proposals
                intersect with Medicaid, those beneficiaries dually eligible for
                Medicare and Medicaid, Medicare Advantage, and certain requirements
                related to compliance, quality measurement, and Electronic Health
                Records. While these issues were not addressed specifically in the
                proposed rule, we believe it is important to clarify how the OTP
                policies interface with existing policies under these other programs.
                The following is a summary of the comments we received and our
                responses.
                    Comment: Most commenters expressed concerns that in the states that
                currently cover OTP services under Medicaid, the transition from
                Medicaid to Medicare as primary payer for those OTP services for dually
                eligible individuals could result in disruptions to dually eligible
                individuals' OTP treatment, as well as for OTP providers. Several
                commenters noted the tight timeframes for OTP providers to enroll in
                Medicare. For those OTPs currently serving dually eligible individuals
                under Medicaid, any enrollment backlog may create cash flow problems
                for these providers, as Medicaid is the payer of last resort, which
                normally means Medicaid stops paying for a benefit once Medicare starts
                to cover it. They also noted that the timing of the final regulation
                would result in less than 60 days to implement needed changes to
                billing systems. Commenters requested flexibilities during this
                transition, including a transition period in which OTP providers could
                still bill Medicaid, with well-publicized transition timelines for a
                grace period during which improperly submitted claims could be
                corrected.
                    Response: We appreciate the concerns expressed by commenters. As
                discussed in more detail below, Medicaid must pay for OTP services for
                dually eligible individuals if the service is covered by the Medicaid
                state plan and the OTP provider is enrolled in Medicaid and not yet
                enrolled in Medicare.
                    We will issue guidance to states on strategies to promote
                continuity of care for dually eligible individuals during this
                transition period while upholding their responsibilities under Medicaid
                as the payer of last resort. We will remind states that Medicaid must
                pay for services delivered to these beneficiaries by OTP providers who
                are not yet enrolled in Medicare. Recognizing that many OTP providers
                may not yet be enrolled in Medicare on January 1, 2020, we will
                recommend that states not impose systems edits to automatically reject
                claims, (under the assumption that the OTP is Medicare-enrolled and
                therefore Medicare is the appropriate primary payer for the dually
                eligible individual) for OTP services furnished to dually eligible
                individuals at the start of the year. We will encourage states to reach
                out to their Medicaid-enrolled OTP providers to advise them to enroll
                as quickly as possible in Medicare. To support continuity of care, we
                will ask states to offer OTPs options during the interim until Medicare
                approves the provider enrollment, including billing Medicaid for
                payment (with the understanding that Medicaid will later recoup the
                Medicaid payments made, back to the effective date of Medicare provider
                enrollment, and the provider will bill Medicare instead for those
                claims), or to hold claims and bill Medicare once the OTP provider is
                Medicare-enrolled. As requested by the commenters, we will also include
                in our outreach to OTP providers information about these transition
                options.
                    Comment: One commenter who supported a transition period requested
                that the transition period be extended in cases where OTP providers
                need to be credentialed and contract with a large number of Medicare
                Advantage plans, or when Medicaid Managed Care Organizations are
                involved in covering the Medicare cost-sharing. Commenters noted that
                unlike Medicare, where there is a single provider enrollment process,
                it will take significantly longer for OTP providers to become network
                providers with multiple Medicare Advantage plans, potentially delaying
                their ability to provide services to dually eligible enrollees of those
                plans.
                    Response: We share the concern around ensuring continuity of care
                for dually eligible individuals who are currently obtaining treatment
                from an OTP provider through Medicaid and are enrolled in a Medicare
                Advantage managed care plan. The factors impacting transition are
                different in Medicare Advantage from those discussed below for Original
                Medicare. Under section 1852(a) of the Act and 42 CFR 422.100, Medicare
                Advantage (MA) plans must cover the Medicare OTP benefit because it is
                a Part B benefit. MA plans may meet this obligation by contracting with
                OTP providers or making other arrangements with non-contracted OTP
                providers. Under current MA program requirements, MA plans may furnish
                OTP access for their enrollees either by establishing direct contracts
                with OTPs or by arranging access on a non-contract basis. If an MA plan
                furnishes access to OTPs by contracting with one or more OTPs the MA
                plan is not necessarily required to contract with all OTP providers in
                the area, but must ensure that the contracts with OTPs it does have
                furnish sufficient access and availability to OTP services for its
                enrollees and are also consistent with the community pattern of care
                based on the service area where the MA plan is being offered. If an MA
                plan allows its enrollees to obtain OTP services on a non-contract
                basis the MA plan must ensure that its enrollees are able to access OTP
                services that are available within the community pattern of care. (see
                Sec.  422.112). If a dually eligible individual enrolled in the plan is
                currently in treatment with an OTP provider with which the plan does
                not contract, the plan should create a transition process under which
                the individual can continue to see their current OTP provider while the
                plan works with the individual to transition to a network provider.
                Allowing the individual to continue to see their current provider
                during this transition will ensure continuity of care for this
                vulnerable population.
                    Comment: One commenter specifically requested that dually
                [[Page 62670]]
                eligible individuals receiving services from an OTP provider not
                enrolled in Medicare be able to continue to receive treatment from that
                provider, and further requested this apply to dually eligible
                individuals not yet in treatment but who have no Medicare OTP providers
                in their area.
                    Response: As noted above, Medicaid must still cover OTP services
                for dually eligible individuals whose provider is not yet enrolled in
                Medicare. This flexibility promotes continuity of care for dually
                eligible individuals already receiving OTP services under Medicaid now,
                as well as providing beneficiaries access to Medicaid-enrolled OTP
                providers when there are no Medicare-enrolled OTP providers in their
                area.
                    Comment: Some commenters requested clarification on how OTP
                providers would bill for dually eligible individuals once Medicare
                starts covering these services on January 1, 2020, including the
                process for the Part B deductible to be paid by Medicaid.
                    Response: Once Medicare starts covering OTP services, a Medicare-
                enrolled OTP provider would bill Medicare for OUD treatment services
                furnished to dually eligible individuals under Original Medicare. For
                Original Medicare, if the dually eligible beneficiary has not yet met
                their annual Medicare Part B deductible, Medicare will automatically
                ``crossover'' the claim to Medicaid to adjudicate for payment of the
                deductible. In addition, please see responses to comments below for a
                discussion of the process when a state is using different billing codes
                than Medicare, and when an OTP provider is not yet enrolled in
                Medicare.
                    For OTP providers serving dually eligible individuals enrolled in
                Medicare Advantage, there is no automated crossover process. For cost
                sharing applicable to the OTP benefit under the MA plan, MA plans are
                required by Sec.  422.504(g)(1) to specify in their contracts with
                providers that such dually eligible enrollees will not be held liable
                for Medicare Part A and Part B cost sharing when the State is
                responsible for paying such amounts, and to inform providers of
                Medicare and Medicaid benefits, and rules for enrollees eligible for
                Medicare and Medicaid. We understand most MA plans have not entered
                into coordination of benefit agreements with state Medicaid agencies.
                In these instances, the MA plan would not have any means to forward
                claims for cost sharing directly to state Medicaid programs for
                payment; and so an OTP provider would need to bill Medicaid directly
                for the cost sharing that the provider may not collect from the
                enrollee; this may also mean that the OTP provider has to re-code the
                claim if the state uses different billing codes than the Medicare
                Advantage plan uses.
                    Comment: One commenter specifically requested that the timeframe
                for state Medicaid agencies to update their respective fee schedules
                match the Medicare payment methodology to prevent denials when Medicare
                sends the crossover claim to Medicaid for the deductible.
                    Response: State Medicaid programs often use different codes and pay
                differently than Medicare. There is no requirement to match the
                Medicare payment methodology, but states do need to be able to process
                claims for the beneficiary's cost-sharing liability for most dually
                eligible individuals. If the state uses different billing codes, its
                claims processing system may initially deny the crossover claim, and
                send a remittance advice to the provider notifying the provider of the
                denial. The OTP provider should then re-code the claim using the
                Medicaid billing codes and resubmit to Medicaid for processing.
                    Comment: A few commenters suggested that CMS offer an expedited
                process for receiving a Medicare denial, to provide Medicaid with proof
                that Medicare will not cover the OTP services. A few other commenters
                also suggested CMS make available an up-to-date-listing of Medicare
                enrolled OTP providers in each state.
                    Response: We agree it is important to support OTP providers and
                states by providing the information needed to facilitate the process
                for an OTP provider to bill Medicaid for services furnished to a dually
                eligible individual, when that is permitted. Medicaid will often accept
                a Medicare claims denial as proof that Medicare will not cover the
                service, and will process the claim for Medicaid coverage. However,
                Medicare can only process a claim from a Medicare-enrolled provider,
                and thus can only issue a claims denial to a Medicare-enrolled
                provider.
                    As we note in our response to a prior comment, Medicaid must pay
                for OUD treatment services furnished by an OTP to a dually eligible
                individual when the service is covered by the Medicaid state plan and
                the OTP provider is enrolled in Medicaid, but is not enrolled in
                Medicare. We agree with the suggestion to make publicly-available and
                update a list of Medicare-enrolled OTP providers so OTPs and states
                have evidence that a given provider is not Medicare-enrolled. We
                anticipate this information will also have value for Medicare
                beneficiaries seeking OUD treatment services in OTPs. We also note that
                states already have access to the CMS Provider Enrollment, Chain, and
                Ownership System (PECOS) provider enrollment system, and can confirm
                provider enrollment or lack thereof through queries to that system.
                    Comment: Several commenters expressed concern about the
                intersection of Medicaid's ``Upper Payment Limit'' (UPL) policy with
                the proposed Medicare payment rates for OTP services. The commenters
                noted that most states that cover OTP services have payment rates that
                are higher than the proposed Medicare payment rates, and expressed a
                concern that Medicaid's UPL policy requires Medicaid rates to be lower
                than Medicare's. Commenters noted that unless Medicare significantly
                increases its proposed rates, state Medicaid agencies would be forced
                to lower theirs to comply with the UPL. Commenters requested that CMS
                increase the Medicare rates for services furnished by OTPs to exceed
                the Medicaid rate in every state, or not apply the UPL requirements to
                the Medicaid OTP services.
                    Response: We appreciate the concern expressed by the commenters.
                However, the UPL requirements do not directly impact payment rates for
                individual services such as the OUD treatment services furnished by
                OTPs in the way commenters describe, and states have policy options to
                address UPL-related concerns. As background, state Medicaid agencies
                can opt to cover OTP services under the Medicaid clinic benefit or the
                Medicaid rehabilitation benefit. The Medicaid clinic benefit is subject
                to a UPL based on estimated Medicare payments, but states demonstrate
                compliance with this requirement at an aggregate level across the range
                of services covered under the clinic benefit as a whole for a given
                year. States are not required to set Medicaid payment lower than
                Medicare at a service or code-level basis. Within the UPL requirements,
                states have significant flexibility in how they may pay for individual
                services or codes or make payments to clinics that specialize in
                providing certain types of care. As a result, states offering OTP
                services under the clinic benefit would not be required to reduce their
                payment rates to be less than Medicare for OTP services. We will issue
                guidance reminding states that the UPL policy for the clinic benefit
                applies at the aggregate level, and will work with states to determine
                how to comply with the UPL if they currently cover OTP under the clinic
                benefit. For states that offer OTP services under the rehabilitation
                benefit, we note there is no UPL for that benefit, so the Medicare
                [[Page 62671]]
                payment rate for OTP services does not impact Medicaid payment for
                those states. As a result, there is no need to adjust the Medicare
                payment rates for OUD treatment services furnished by OTPs that we are
                adopting in this final rule to address this concern.
                    Comment: One commenter suggested CMS provide guidance to states on
                what the Medicare OTP benefit does and does not cover, to facilitate
                Medicaid covering specific OTP services for dually eligible individuals
                that Medicare does not cover.
                    Response: We acknowledge that states may have a more expansive
                benefit for services provided by OTPs than Medicare's, and that in
                those situations, states may continue to cover specific OTP services
                that Medicare does not. To support a smooth transition, we will provide
                guidance to states to describe the Medicare OTP benefit and remind them
                that Medicaid may still cover specific OTP services not covered under
                the Medicare OTP benefit.
                    Comment: Several commenters suggested that CMS conduct significant
                outreach on coordination of benefits; that is, how Medicare will be
                primary payer and Medicaid will be secondary payer for dually eligible
                individuals. One commenter further suggested that OTP providers should
                receive training and technology to facilitate screening patients for
                Medicare, as well as Medicaid, eligibility and enrollment.
                    Response: We agree with the need for significant outreach to OTP
                providers regarding coordination of benefits, and are collaborating
                with SAMHSA--which certifies OTP providers--to do so. We will explore
                options around providing technical assistance on connecting eligible
                clients to Medicare and Medicaid coverage.
                    Comment: One commenter suggested that as part of supporting the
                transition from Medicaid to Medicare coverage of OTP services, CMS
                issue guidance to remind states to continue transportation coverage for
                full benefit dually eligible individuals receiving services under the
                Medicare OTP benefit.
                    Response: As noted elsewhere, Medicare is the primary payer for
                services that are payable by both Medicare and Medicaid. However,
                Medicare has a limited non-emergency ambulance transportation benefit.
                If a full benefit dually eligible individual is obtaining a Medicaid-
                coverable benefit for which Medicare is the primary payer, the state
                must assure, in certain circumstances, transportation to the medical
                service (in the limited instances in which Medicaid does not cover a
                service Medicare covers, it is optional for states to cover
                transportation). As a result, when states cover OTP services, and when
                the applicable criteria are met, Medicaid must assure non-emergency
                medical transportation for full benefit dually eligible individuals
                obtaining Medicare-covered OTP services.
                    Comment: Several commenters supported the proposal to initially set
                the copayment for OTP services zero, but requested that this policy be
                made permanent for dually eligible individuals.
                    Response: We will consider issues on future copayment rates, and on
                keeping the zero copayment for dually eligible individuals, as part of
                any future rulemaking on the cost-sharing requirements for the benefit
                as a whole.
                    Comment: A commenter raised concerns regarding the January 1, 2020
                implementation date for the OTP benefit due to implementation barriers.
                The commenter stated that MAOs need final payment codes, payment
                information and clarity regarding any benefit caps or other benefit
                limits. The commenter further stated that MAOs need additional time to
                finalize contracting systems and to develop operational details for the
                benefit.
                    Response: Although we understand the concern, we do not plan to
                delay the implementation of this benefit due to the acute need for the
                OUD treatment services furnished by OTPs. We will work closely with
                MAOs to ensure timely implementation of this benefit. Plans must
                provide enrollees with a level of access to Medicare-covered OTP
                services that is consistent with prevailing community patterns of care
                in the areas where the network is being offered (Sec.  422.112(a)(10)).
                We note that, for CY 2020, Medicare Advantage plans may contract with
                an OTP provider so long as the requirements for such providers (such as
                licensure, certification, and other qualifications, etc.) under Titles
                XVIII and XI of the Act are met. Allowing the individual to continue to
                see their current provider during this transition will ensure
                continuity of care for this vulnerable population.
                    Comment: One commenter recommended that CMS issue a non-enforcement
                or ``hold harmless'' grace period against plans for Part B vs. Part D
                determinations for 2020, with respect to audits and other consequences
                such as Star Ratings related to the new OUD treatment services benefit.
                    Response: We do not believe it is appropriate for CMS to issue a
                ``hold harmless'' period regarding the implementation of the new OTP
                benefit. As we have noted in other responses, we believe there is an
                urgency in making this benefit available to people struggling with
                opioid use disorder. CMS will work closely with organizations to ensure
                a smooth implementation of this benefit. With regard to the Part B
                versus Part D determination, we remind Medicare Advantage plans that
                Sec.  422.112(b)(7) requires plans that also cover Part D drugs to
                coordinate coverage and have a process in place to ensure provision of
                the covered drug to an enrollee in a timely fashion. CMS clarifies that
                buprenorphine prescribed by DATA 2000 providers outside of OTPs can
                continue to be covered under Part D. The DATA 2000 and OTP programs are
                designed to meet the needs of those needing opioid dependency treatment
                in different ways. Therefore, because buprenorphine is still covered
                under Part D when furnished outside an OTP, sponsors should not need to
                implement new point of service Part B versus Part D pharmacy edits for
                a buprenorphine claim. In addition, any substantive changes to the Star
                Ratings measure specifications must be adopted through rulemaking per
                Sec. Sec.  422.164 and 423.184.
                    Comment: A commenter recommended that CMS delay the implementation
                of the OTP benefit until January 1, 2021, because MA plans did not have
                an opportunity to account for the new benefit in their 2020 year bids.
                    Response: In the CY 2020 Call Letter released April 1, 2019
                available at the following web link: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf,
                CMS issued guidance to MAOs regarding section 2005 of the SUPPORT Act
                and implementing the OTP benefit. In the Call Letter, CMS reminded
                plans that opioid use disorder treatment services furnished by OTPs
                would be covered as a Medicare Part B benefit beginning January 1,
                2020. We also stated that MA organizations should prepare their bids
                using available information and reiterated that MA plans must provide
                all medically necessary Part A and Part B covered services to enrollees
                consistent with section 1852 of the Act and the regulations in part
                422. As such, MA plans were given the opportunity to account for the
                new benefit in their 2020 bids and did so when bids were submitted on
                June 3, 2019.
                    Comment: A commenter expressed concerns that there may be
                insufficient number of OTPs available in 2020 who are SAMSHA accredited
                with a Medicare provider agreement to contract with MA plans.
                    Response: We note that MA plans will be required to furnish access
                to OTP
                [[Page 62672]]
                services consistent with what is available to Original Medicare
                beneficiaries residing in the same geographic area. (see Sec.  422.112)
                While OTPs will currently not be a specialty included in our evaluation
                of MA networks, all plan covered services must be furnished consistent
                with community patterns of care (see Sec.  422.112(a)(10)). This means
                that a plan's enrollees, who are receiving services from an OTP, cannot
                be required to travel significantly farther than the distance Original
                Medicare beneficiaries are required to travel in order to access
                services from the OTP. MA plans are not required to furnish
                transportation to the OTP facilities as part of the OTP benefit.
                However, MA plans can furnish transportation to health care services as
                a supplemental benefit. In addition, as noted elsewhere, Medicaid must
                assure, in certain circumstances, non-emergency transportation for a
                dually eligible individual to obtain a Medicaid-coverable benefit for
                which Medicare is primary payer.
                    Comment: A commenter stated that, in order to administer this new
                benefit, guidance is needed on which services must be covered by an MA
                plan without cost-sharing and the timelines for coverage without cost-
                sharing (for example, no more than 12 months of active treatment). The
                commenter further stated that since OUD treatment is complex and can
                vary from patient to patient, it is important that plans understand
                whether there should be no cost-sharing on all components or if there
                are specific nuances in how to apply the requirement.
                    Response: MA plans can offer the OTP benefit consistent with the
                bids which were submitted for CY 2020, including proposed cost-sharing.
                We note that MA plans must assure that, in instances in which they
                impose cost-sharing for the OTP benefit, providers do not bill a
                Qualified Medicare Beneficiary for such cost-sharing. (see Sec.
                422.504(g)(1).)
                    Comment: A commenter requested clarification as to whether OTPs
                will be billing Medicare Part B--that is, the FFS Medicare program--for
                services furnished to Medicare Advantage enrollees.
                    Response: No. OTPs that furnish Medicare covered medically
                necessary services to MA enrollees will be paid by the enrollees' MA
                plans. MA plans are required to furnish or cover all benefits that are
                covered by Medicare Part A and Part B, excluding hospice, for their
                enrollees. As previously noted, MA plans are required to contract with,
                or arrange on a non-contract basis for, enrollee access to medically
                necessary OTP services consistent with the community pattern of care.
                MA plans may have direct contracts with OTPs in which they negotiate
                the terms and conditions of payment for the Medicare-covered services
                furnished by the OTP. An OTP treating an MA enrollee that does not have
                a contract with the enrollee's MA plan should contact the MA plan to
                confirm coverage and payment.
                    Comment: A commenter requested additional information about CMS'
                expectations of how the OTP benefit will be made available to Medicare
                Advantage enrollees.
                    Response: In the CY 2020 Call Letter released on April 1, 2019, CMS
                issued guidance to MA organizations regarding section 2005 of the
                SUPPORT Act and implementing the OTP benefit. In the CY 2020 Call
                Letter, CMS reminded plans that opioid use disorder treatment services
                furnished by OTPs would be covered as a Medicare Part B benefit by
                plans beginning January 1, 2020. We also stated that MA organizations
                should prepare their bids using available information and reiterated
                that MA plans must provide all medically necessary Part A and Part B
                covered services to enrollees consistent with section 1852 of the Act
                and the regulations in part 422.
                    For dually eligible individuals who may already be receiving OTP
                services through Medicaid, MA plans should ensure continuity of care
                for their enrollees any time there is a transition from a non-
                contracted to a contracted provider. In addition, as noted above, MA
                plans must assure that in instances in which they impose cost-sharing
                on the OTP benefit, providers do not bill a Qualified Medicare
                Beneficiary for such cost-sharing.
                    Comment: A commenter asks that CMS not allow MA plans to utilize
                prior authorization (PA) or step therapy for treatment of opioid
                withdrawal symptoms.
                    Response: MA plans may use step therapy for Part B drugs when
                medically appropriate and consistent with the requirements in Sec.
                422.136. We also note that when an MA plan processes a coverage request
                that involves prior authorization or other utilization management
                requirements, such as step therapy for Part B drugs, the plan's
                determination on whether to grant approval of a service or a drug for
                an enrollee constitutes an organization determination under part 422,
                subpart M, and is subject to appeal. Specifically, as described at
                Sec.  422.568, the MA organization must notify the enrollee of its
                determination as expeditiously as the enrollee's health condition
                requires. CMS is considering strategies we can use to monitor the
                implementation of the OTP benefit by MA plans and any issues that may
                impede access to medically necessary treatment of opioid use disorder,
                including what data might be available to evaluate plan performance.
                    Comment: A commenter questioned how MA-PD and Prescription Drug
                Plan sponsors will know what beneficiaries are eligible for this
                benefit. The commenter proposes that an option would be to provide an
                indicator in the CMS Medicare Advantage and Prescription Drug data
                System (MARx), with start and end dates, for beneficiary eligibility
                for OTP services.
                    Response: All beneficiaries needing treatment for opioid addiction
                are eligible for this benefit. We appreciate the data suggestion and
                will take it into consideration in our on-going implementation of the
                OTP benefit.
                    Comment: A commenter questioned how Medicare's managed care plan
                partners are supposed to reflect the use of this new benefit in their
                required data submissions.
                    Response: We will furnish guidance to MA organizations and cost
                plans on this topic at a later date.
                    Comment: A commenter requested that since OTPs are currently
                providing OUD services to Medicare beneficiaries, and that the provider
                enrollment process would not start until the new Part B benefit is
                available (January 1, 2020), will CMS allow for payments to OTPs for
                services delivered in the 30 days prior to their successful enrollment.
                    Response: As we noted in a previous response, MA plans cannot
                contract or furnish the Part B OTP services through any OTP that is
                SAMSHA accredited if that OTP has not yet enrolled in Medicare but the
                MA plan may cover or furnish services provided by such a provider as a
                supplemental benefit (Sec.  422.204(b)(3). Allowing the individual to
                continue to see their current provider during this transition will
                ensure continuity of care for this vulnerable population. Furthermore,
                in some situations, the MA plan may be required by Sec.  422.112(a)(3)
                to provide out-of-network access for the OTP benefit and we remind MA
                organizations of their obligations under part 422 regulations to
                furnish all Part A and Part B benefits, excluding hospice, to their
                enrollees.
                    Comment: A commenter noted that the Annual Notice of Change and
                Evidence of Coverage (ANOC and EOC) documents can play an essential
                role in updating beneficiaries as to new benefits, but the timing for
                [[Page 62673]]
                implementation of the OTP benefit in 2020 makes this impractical, and
                instead suggested that CMS undertake a robust public education campaign
                aimed directly at beneficiaries.
                    Response: The SUPPORT Act became law in October 2018 and CMS issued
                guidance to MA organizations in the CY 2020 Draft Call Letter (issued
                in January 2019) and the CY 2020 Final Call Letter (issued in April
                2019) about the requirement to cover the OTP benefit, so MA
                organizations had sufficient time to plan to include the necessary
                information in ANOCs and EOCs for 2020. Medicare Advantage plans are
                required to include the new OTP benefit in their 2020 ANOC/EOC. We are
                also implementing a comprehensive education campaign regarding the new
                OTP benefit. Our public education campaign will feature CMS information
                channels, education resources and outreach leveraging media/stakeholder
                networks to raise awareness and engage Medicare beneficiaries.
                Specifically it will include earned media (for example, drop-in article
                for local/community newspapers), social media (for example, tweets and
                Facebook posts), beneficiary publications, and outreach to beneficiary
                partners including State Health Insurance Assistance Programs (SHIPs)
                across the country, in addition to information available from 1-800-
                MEDICARE and our consumer website, http://www.medicare.gov.
                    Comment: One commenter requested more information about the
                compliance criteria, quality metrics, and electronic health record
                (EHR) requirements that will be used to evaluate OTPs, and whether OTPs
                will be subject to the requirements of the Quality Payment Program.
                    Response: We did not propose any compliance criteria, quality
                metrics, or EHR requirements for OTPs. As OTPs are not one of the
                eligible clinician types for the Quality Payment Program, they are not
                able to participate in MIPS or to be a Qualifying APM Participant (QP).
                However, OTPs may be able to participate in a Center for Medicare and
                Medicaid Innovation payment model, depending on the eligible
                participants identified for that specific model, and then would be
                subject to the requirements of that specific model, which could include
                quality or EHR-related requirements.
                    After a thorough review of the above policy considerations
                reflected in the public comments we received, we are finalizing the
                proposed provisions to implement the new OTP benefit under section 2005
                of the SUPPORT Act, with modifications as described above, at Sec.
                410.67, part 489 and part 498.
                H. Bundled Payments Under the PFS for Substance Use Disorders
                1. Background and Provision
                    In the CY 2019 PFS proposed rule (83 FR 35730), we solicited
                comment on creating a bundled episode of care payment for management
                and counseling treatment for substance use disorders. We received
                approximately 50 comments on this topic, most of which were supportive
                of creating a separate bundled payment for these services. Some
                commenters recommended focusing the bundle on services related to
                medication assisted treatment (MAT) used in treatment for opioid use
                disorder (OUD). Several commenters also recommended that we establish
                higher payment amounts for patients with more complex needs who require
                more intensive services and management, and also expressed concern that
                an episode of care that limited the duration of treatment would not be
                conducive to treating OUD, given the chronic nature of this disorder.
                Other commenters recommended that we establish separate bundled
                payments for treatment of substance use disorders that does, and does
                not, involve MAT.
                    In response to the public comments, we proposed to establish
                bundled payments for the overall treatment of OUD, including
                management, care coordination, psychotherapy, and counseling
                activities. We noted that, if a patient's treatment involves MAT, this
                bundled payment would not include payment for the medication itself.
                Billing and payment for medications under Medicare Part B or Part D
                would remain unchanged. Additionally, payment for medically necessary
                toxicology testing would not be included in the proposed OUD bundle,
                and would continue to be billed separately under the Clinical Lab Fee
                Schedule. We also proposed to implement the new Medicare Part B benefit
                added by section 2005 of the SUPPORT Act for coverage of certain
                services furnished by Opioid Treatment Programs (OTPs) beginning in CY
                2020. We believe the bundled payment under the PFS for OUD treatment
                described below will create an avenue for physicians and other health
                professionals to bill for a bundle of services that is similar to the
                new bundled OUD treatment services benefit, but not furnished by an
                OTP. By creating a separate bundled payment for these services under
                the PFS, we hope to incentivize increased provision of counseling and
                care coordination for patients with OUD in the office setting, thereby
                expanding access to OUD care. We note that use of these codes is
                limited to only beneficiaries diagnosed with OUD; however, we may
                consider other potential bundles describing services for other
                substance use disorders in future rulemaking.
                    To implement this new bundled payment, we proposed to create two
                HCPCS G-codes to describe monthly bundles of services that include
                overall management, care coordination, individual and group
                psychotherapy and counseling for office-based OUD treatment. Although
                we considered proposing weekly-reported codes to describe a bundle of
                services that would align with the proposed OTP bundle, we believe that
                monthly-reported codes will better align with the practice and billing
                of other types of care management services furnished in office settings
                and billed under the PFS (for example, behavioral health integration
                (BHI) services). We believe monthly-reported codes would be less
                administratively burdensome for practitioners, and more likely to be
                consistent with care management and prescribing patterns in the office
                setting (as compared with an OTP) given the increased use of long-
                acting MAT drugs (such as injectable naltrexone or implanted
                buprenorphine) in the office setting compared to the OTP setting. We
                note that these codes should not be billed for beneficiaries who are
                receiving treatment at an OTP, as we believe that would be duplicative
                since the bundled payments made to OTPs cover similar services for the
                treatment of OUD. Based on feedback we received through the comment
                solicitation, we proposed to create a code to describe the initial
                month of treatment, which would include intake activities and
                development of a treatment plan, as well as assessments to aid in
                development of the treatment plan in addition to care coordination,
                individual therapy, group therapy, and counseling; a code to describe
                subsequent months of treatment including care coordination, individual
                therapy, group therapy, and counseling; and an add-on code that could
                be billed in circumstances when effective treatment requires additional
                resources for a particular patient that substantially exceed the
                resources included in the base codes. In other words, the add-on code
                would address extraordinary circumstances that are not contemplated by
                the bundled code. We acknowledge that the course of treatment for OUD
                is variable, and in some instances, the first several months of
                treatment may be more resource intensive. We solicited comment on
                whether we should consider creating a separately billable
                [[Page 62674]]
                code or codes to describe additional resources involved in furnishing
                OUD treatment-related services after the first month, for example, when
                substantial revisions to the treatment plan are needed, and what
                resource inputs we might consider in setting values for such codes.
                    We believe that, in general, bundled payments create incentives to
                provide efficient care by mitigating incentives tied to volume of
                services furnished, and that these incentives can be undermined by
                creating separate billing mechanisms to account for higher resource
                costs for particular patients. However, we share some of the concerns
                raised by commenters that an OUD bundle should not inadvertently limit
                the appropriate amount of OUD care furnished to patients with varying
                medical needs. In consideration of this concern, we proposed to create
                an add-on code to make appropriate payment for additional resource
                costs in order to mitigate the risks that the bundled OUD payment might
                limit clinically-indicated patient care for patients that require
                significantly more care than is in the range of what is typical for the
                kinds of care described by the base codes. However, we are also
                interested in comments regarding ways we might better stratify the
                coding for OUD treatment to reflect the varying needs of patients
                (based on complexity or frequency of services, for example) while
                maintaining the full advantage of the bundled payment, including
                increased efficiency and flexibility in furnishing care.
                    We anticipate that these services would often be billed by
                addiction specialty practitioners, but note that these codes are not
                limited to any particular physician or nonphysician practitioner (NPP)
                specialty. Additionally, unlike the codes that describe care furnished
                using the psychiatric collaborative care model (CPT codes 99492, 99493,
                and 99494), which require consultation with a psychiatric consultant,
                we did not propose to require consultation with a specialist as a
                condition of payment for these codes, but we note that consultation
                with a specialist could be counted toward the minutes required for
                billing HCPCS codes G2086, G2087, and G2088.
                    The codes and descriptors for the services are:
                     HCPCS code G2086: Office-based treatment for opioid use
                disorder, including development of the treatment plan, care
                coordination, individual therapy and group therapy and counseling; at
                least 70 minutes in the first calendar month.
                     HCPCS code G2087: Office-based treatment for opioid use
                disorder, including care coordination, individual therapy and group
                therapy and counseling; at least 60 minutes in a subsequent calendar
                month.
                     HCPCS code G2088: Office-based treatment for opioid use
                disorder, including care coordination, individual therapy and group
                therapy and counseling; each additional 30 minutes beyond the first 120
                minutes (List separately in addition to code for primary procedure).
                    For the purposes of valuation for HCPCS codes G2086 and G2087, we
                are assuming two individual psychotherapy sessions per month and four
                group psychotherapy sessions per month; however, we understand that the
                number of therapy and counseling sessions furnished per month will vary
                among patients and also fluctuate over time based on the individual
                patient's needs. Consistent with the methodology for pricing other
                services under the PFS, HCPCS codes G2086, G2087, and G2088 are 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. In order to maintain the advantages inherent
                in developing a payment bundle, we proposed that the add-on code (HCPCS
                code G2088) can only be billed when the total time spent by the billing
                professional and the clinical staff furnishing the OUD treatment
                services described by the base code exceeds double the minimum amount
                of service time required to bill the base code for the month. We
                believe it is appropriate to limit billing of the add-on code to
                situations where medically necessary OUD treatment services for a
                particular patient exceed twice the minimum service time for the base
                code because, as noted above, the add-on code is intended to address
                extraordinary situations where effective treatment requires additional
                resources that substantially exceed the resources included in the base
                codes. For example, the needs of a particular patient in a month may be
                unusually acute, well beyond the needs of the typical patient; or there
                may be some months when psychosocial stressors arise that were
                unforeseen at the time the treatment plan was developed, but warrant
                additional or more intensive therapy services for the patient. We
                proposed that when the time requirement is met, HCPCS code G2088 could
                be billed as an add-on code during the initial month or subsequent
                months of OUD treatment. Practitioners should document the medical
                necessity for the use of the add-on code in the patient's medical
                record. We solicited comment on the proposal.
                    We proposed to value HCPCS codes G2086, G2087, and G2088 using a
                building block methodology that sums the work RVUs and direct PE inputs
                from codes that describe the component services we believe would be
                typical, consistent with the approach we have previously used in
                valuing monthly care management services that include face-to-face
                services within the payment. For HCPCS code G2086, we developed
                proposed inputs using a crosswalk to CPT code 99492 (Initial
                psychiatric collaborative care management, first 70 minutes in the
                first calendar month of behavioral health care manager activities, in
                consultation with a psychiatric consultant, and directed by the
                treating physician or other qualified health care professional, with
                the following required elements: Outreach to and engagement in
                treatment of a patient directed by the treating physician or other
                qualified health care professional; initial assessment of the patient,
                including administration of validated rating scales, with the
                development of an individualized treatment plan; review by the
                psychiatric consultant with modifications of the plan if recommended;
                entering patient in a registry and tracking patient follow-up and
                progress using the registry, with appropriate documentation, and
                participation in weekly caseload consultation with the psychiatric
                consultant; and provision of brief interventions using evidence-based
                techniques such as behavioral activation, motivational interviewing,
                and other focused treatment strategies.), which is assigned a work RVU
                of 1.70, plus CPT code 90832 (Psychotherapy, 30 minutes with patient),
                which is assigned a work RVU of 1.50 (assuming two over the course of
                the month), and CPT code 90853 (Group psychotherapy (other than of a
                multiple-family group)), which is assigned a work RVU of 0.59 (assuming
                four over the course of a month), for a work RVU of 7.06. The required
                minimum number of minutes described in HCPCS code G2086 is also based
                on a crosswalk to CPT code 99492. Additionally, for HCPCS code G2086,
                we proposed to use a crosswalk to the direct PE inputs associated with
                CPT code 99492, CPT code 90832 (times two), and CPT code 90853 (times
                four). We believe that the work and PE described by these crosswalk
                codes is analogous to the services described in HCPCS code G2086
                because HCPCS code G2086 includes similar care
                [[Page 62675]]
                coordination activities as described in CPT code 99492 and bundles in
                the psychotherapy services described in CPT codes 90832 and 90853.
                    We proposed to value HCPCS code G2087 using a crosswalk to CPT code
                99493 (Subsequent psychiatric collaborative care management, first 60
                minutes in a subsequent month of behavioral health care manager
                activities, in consultation with a psychiatric consultant, and directed
                by the treating physician or other qualified health care professional,
                with the following required elements: tracking patient follow-up and
                progress using the registry, with appropriate documentation;
                participation in weekly caseload consultation with the psychiatric
                consultant; ongoing collaboration with and coordination of the
                patient's mental health care with the treating physician or other
                qualified health care professional and any other treating mental health
                providers; additional review of progress and recommendations for
                changes in treatment, as indicated, including medications, based on
                recommendations provided by the psychiatric consultant; provision of
                brief interventions using evidence-based techniques such as behavioral
                activation, motivational interviewing, and other focused treatment
                strategies; monitoring of patient outcomes using validated rating
                scales; and relapse prevention planning with patients as they achieve
                remission of symptoms and/or other treatment goals and are prepared for
                discharge from active treatment), which is assigned a work RVU of 1.53,
                plus CPT code 90832, which is assigned a work RVU of 1.50 (assuming two
                over the course of the month), and CPT code 90853, which is assigned a
                work RVU of 0.59 (assuming four over the course of a month), for a work
                RVU of 6.89. The required minimum number of minutes described in HCPCS
                code G2087 is also based on a crosswalk to CPT codes 99493. For HCPCS
                code G2087, we proposed to use a crosswalk to the direct PE inputs
                associated with CPT code 99493, CPT code 90832 (times two), and CPT
                code 90853 (times four). We believe that the work and PE described by
                these crosswalk codes is analogous to the services described in HCPCS
                code G2087 because HCPCS code G2087 includes similar care coordination
                activities as described in CPT code 99493 and bundles in the
                psychotherapy services described in CPT codes 90832 and 90853.
                    We proposed to value HCPCS code G2088 using a crosswalk to CPT code
                99494 (Initial or subsequent psychiatric collaborative care management,
                each additional 30 minutes in a calendar month of behavioral health
                care manager activities, in consultation with a psychiatric consultant,
                and directed by the treating physician or other qualified health care
                professional (List separately in addition to code for primary
                procedure)), which is assigned a work RVU of 0.82. The required minimum
                number of minutes described in HCPCS code G2087 is also based on a
                crosswalk to CPT codes 99493. For HCPCS code G2088, we proposed to use
                a crosswalk to the direct PE inputs associated with CPT code 99494. We
                believe that the work and PE described by this crosswalk code is
                analogous to the services described in HCPCS code G2088 because HCPCS
                code G2088 includes similar care coordination activities as described
                in CPT code 99494.
                    We understand that many beneficiaries with OUD have comorbidities
                and may require medically-necessary psychotherapy services for other
                behavioral health conditions. In order to avoid duplicative billing, we
                proposed that, when furnished to treat OUD, CPT codes 90832, 90834,
                90837, and 90853 may not be reported by the same practitioner for the
                same beneficiary in the same month as HCPCS codes G2086, G2087, and
                G2088. We solicited comments on the proposal.
                    We proposed that practitioners reporting the OUD bundle must
                furnish a separately reportable initiating visit in association with
                the onset of OUD treatment, since the bundle requires a level of care
                coordination that cannot be effective without appropriate evaluation of
                the patient's needs. This is similar to the requirements for chronic
                care management (CCM) services (CPT codes 99487, 99489, 99490, and
                99491) and BHI services (CPT codes 99484, 99492, 99493, and 99494)
                finalized in the CY 2017 PFS final rule (81 FR 80239). The initiating
                visit would establish the beneficiary's relationship with the billing
                practitioner, ensure the billing practitioner assesses the beneficiary
                to determine clinical appropriateness of MAT in cases where MAT is
                being furnished, and provide an opportunity to obtain beneficiary
                consent to receive care management services (as discussed further
                below). We proposed that the same services that can serve as the
                initiating visit for CCM services and BHI services can serve as the
                initiating visit for the services described by HCPCS codes G2086-G2088.
                For new patients or patients not seen by the practitioner within a year
                prior to the commencement of CCM services and BHI services, the billing
                practitioner must initiate the service during a ``comprehensive'' E/M
                visit (levels 2 through 5 E/M visits), annual wellness visit (AWV) or
                initial preventive physical exam (IPPE). The face-to-face visit
                included in transitional care management (TCM) services (CPT codes
                99495 and 99496) also qualifies as a ``comprehensive'' visit for CCM
                and BHI initiation. We proposed that these visits could similarly serve
                as the initiating visit for OUD services.
                    We proposed that the counseling, therapy, and care coordination
                described in the OUD treatment codes could be provided by professionals
                who are qualified to provide the services under state law and within
                their scope of practice ``incident to'' the services of the billing
                physician or other practitioner. We also proposed that the billing
                clinician would manage the patient's overall care, as well as supervise
                any other individuals participating in the treatment, similar to the
                structure of the BHI codes describing the psychiatric collaborative
                care model finalized in the CY 2017 PFS final rule (81 FR 80229), in
                which services are reported by a treating physician or other qualified
                health care professional and include the services of the treating
                physician or other qualified health care professional, as well as the
                services of other professionals who furnish services incident to the
                services of the treating physician or other qualified health care
                professional. Additionally, we proposed to add these codes to the list
                of designated care management services for which we allow general
                supervision of the non-face-to-face portion of the required services.
                Consistent with policies for other separately billable care management
                services under the PFS, because these proposed OUD treatment bundles
                include non-face-to-face care management components, we proposed that
                the billing practitioner or clinical staff must document in the
                beneficiary's medical record that they obtained the beneficiary's
                consent to receive the services, and that, as part of the consent, they
                informed the beneficiary that there is cost sharing associated with
                these services, including potential deductible and coinsurance amounts,
                for both in-person and non-face-to-face services that are provided.
                    We proposed to allow any of the individual therapy, group therapy
                and counseling services included in HCPCS codes G2086, G2087, and G2088
                to be furnished via telehealth, as clinically appropriate, in order to
                increase access to care for beneficiaries. As discussed in section
                II.F. of this final rule regarding
                [[Page 62676]]
                Telehealth Services, like certain other non-face-to-face PFS services,
                the components of HCPCS codes G2086 through G2088 describing care
                coordination are commonly furnished remotely using telecommunications
                technology, and do not require the patient to be present in-person with
                the practitioner when they are furnished. As such, these services are
                not considered telehealth services for purposes of Medicare, and we do
                not need to consider whether the non-face-to-face aspects of HCPCS
                codes G2086 through G2088 are similar to other telehealth services. If
                the non-face-to-face components of HCPCS codes G2086 through G2088 were
                separately billable, they would not need to be on the Medicare
                telehealth list to be covered and paid in the same way as services
                delivered without the use of telecommunications technology.
                    Section 2001(a) of the SUPPORT Act amended section 1834(m) of the
                Act, adding a new paragraph (7) that removes the geographic limitations
                for telehealth services furnished on or after July 1, 2019, to an
                individual with a substance use disorder (SUD) diagnosis for purposes
                of treatment of such disorder or co-occurring mental health disorder.
                The new paragraph at 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. As discussed in section II.F. of this final rule,
                Telehealth Services, we proposed to add HCPCS codes G2086, G2087, and
                G2088 to the list of Medicare Telehealth services. Because certain
                required services (such as individual psychotherapy or group
                psychotherapy services) that are included in the proposed OUD bundled
                payment codes would be furnished to treat a diagnosed SUD, and would
                ordinarily require a face-to-face encounter, they could be furnished
                more broadly as telehealth services as permitted under section
                1834(m)(7) of the Act.
                    For these services described above (HCPCS codes G2086, G2087, and
                G2088), we solicited comment on how these potential codes, descriptors,
                and payment rates align with state Medicaid coding and payment rates
                for the purposes of state payment of cost sharing for Medicare-Medicaid
                dually eligible individuals. Additionally, we understand that treatment
                for OUD can vary, and that MAT alone has demonstrated efficacy. In
                cases where a medication such as buprenorphine or naltrexone is used to
                treat OUD alone, without therapy or counseling, we note that existing
                applicable codes can be used to furnishing and bill for that care (for
                example, using E/M visits, in lieu of billing the bundled OUD codes
                proposed here).
                    As discussed in section II.G. of this final rule, Medicare Coverage
                for Certain Services Furnished by Opioid Treatment Programs, we
                proposed to set the copayment at zero for OUD services furnished by an
                OTP, given the flexibility in section 1834(w)(1) of the Act for us to
                set the copayment amount for OTP services either at zero or at an
                amount above zero. We note that we do not have the statutory authority
                to eliminate the deductible and coinsurance requirements for the
                bundled OUD treatment services under the PFS. We acknowledge the
                potential impact of coinsurance on patient health care decisions and
                intend to monitor its impact if these proposals were to be finalized.
                    Finally, we recognize that historically, the CPT Editorial Panel
                has frequently created CPT codes describing services that we originally
                established using G-codes and adopted them through the CPT Editorial
                Panel process. We note that we would consider using any newly available
                CPT coding to describe services similar to those described here in
                future rulemaking, as early as CY 2021. We would consider and adopt any
                such CPT codes through subsequent rulemaking.
                    Additionally, we understand that in some cases, OUD can first
                become apparent to practitioners in the emergency department setting.
                We recognize that there is not specific coding that describes diagnosis
                of OUD or the initiation of, or referral for, MAT in the emergency
                department setting. We solicited comment on the use of MAT in the
                emergency department setting, including initiation of MAT and the
                potential for either referral or follow-up care, as well as the
                potential for administration of long-acting MAT agents in this setting,
                in order to better understand typical practice patterns to help inform
                whether we should consider making separate payment for such services in
                future rulemaking. We solicited feedback from stakeholders and the
                public on other potential bundles describing services for other
                substance use disorders for our consideration in future rulemaking.
                    We received public comments on the proposed bundled payments under
                the PFS for substance use disorders. The following is a summary of the
                comments we received and our responses.
                    Comment: Many commenters expressed support for this proposal and a
                few noted that the PFS bundle would provide an opportunity to increase
                access to OUD treatment for beneficiaries who live in areas without an
                OTP, but also encouraged CMS to seek opportunities to more closely
                align the benefit across OTP and PFS settings before it is introduced
                and to monitor for any unintended responses to payment incentives,
                noting differences in the number of psychotherapy sessions included.
                    Response: We agree with the commenters regarding the importance of
                alignment in these services when furnished in different settings and
                note that we are finalizing several changes to the coding and payment
                for services furnished in an OTP (see section II.G of this final rule),
                which we believe more closely align the payments made by Medicare for
                OUD services across settings. For example, we are finalizing using a
                building block methodology to calculate the payment rate for the OTP
                bundled payments using Medicare rates, including the rates for CPT
                codes 90832 and 90853, which were also used to calculate the payment
                rates HCPCS codes G2086, G2087, and G2088. Additionally, we are
                finalizing an adjustment to the OTP bundled payments to account for
                intake activities, similar to activities included in HCPCS code G2086,
                which describes the initial month of treatment. In response to the
                comments related to monitoring for unintended responses to payment
                incentives, we note that we will be monitoring utilization of HCPCS
                codes G2086, G2087, and G2088 and their interaction with other
                services, as well as the codes describing bundled payments for services
                furnished at OTPs.
                    Comment: A few commenters commended CMS on several aspects of this
                proposal and urged that the proposed codes and valuations be finalized,
                and also recommended that CMS consider establishing bundled payment
                amounts that recognize services for different levels of patient need
                and different types of practice arrangements, including consultation
                with specialists.
                    Response: We thank the commenters for their statements of support.
                We are finalizing the payment amounts for HCPCS codes G2086, G2087, and
                G2088 as proposed. We also appreciate the commenters' views on coding
                for these services, and will consider whether it would be appropriate
                to create codes describing different levels of patient need and
                different practice arrangements for possible future rulemaking.
                [[Page 62677]]
                    Comment: A few commenters recommended that CMS adjust the payment
                methodology for these services to account for patient complexity/
                severity using the American Society of Addiction Medicine (ASAM)
                Criteria or other equivalent criteria and to account for different
                types of practice arrangements and emerging technologies. These
                commenters also recommended that we lower the threshold for billing the
                add-on code to allow it to be billed when the OUD treatment services
                described by the base code exceeds 125-150 percent of the minimum time
                required to bill the base code for the month. Additionally, the
                commenters recommended that CMS urge health care practitioners to
                consult with physician addiction specialists, as appropriate, when
                treating patients with moderate to severe OUD.
                    Response: After considering public comments, we are finalizing our
                proposal without modification that HCPCS code G2088 can be billed when
                the total time spent by the billing professional and the clinical staff
                furnishing the OUD treatment services described by the base code
                exceeds double the minimum amount of service time required to bill the
                base code for the month. We continue to believe it is appropriate to
                limit billing of the add-on code to situations where medically
                necessary OUD treatment services for a particular patient exceed twice
                the minimum service time for the base code because, as noted above, the
                add-on code is intended to address extraordinary situations where
                effective treatment requires additional resources that substantially
                exceed the resources included in the base codes. Additionally, we agree
                with the commenter's recommendation that practitioners furnishing OUD
                treatment services should consult with addiction specialists, as
                clinically appropriate.
                    Comment: Many commenters requested that CMS allow additional
                psychotherapy services to be furnished for patients receiving treatment
                for OUD or another SUD. A few commenters expressed concern that a
                practitioner would not be able to bill separately for psychotherapy
                services furnished to beneficiaries with OUD and a co-occurring mental
                health condition, noting that in rural areas there may not be enough
                behavioral health providers for a patient to be seen by separate
                practitioners for SUD and mental health diagnoses.
                    Response: It is not our intention to limit access to medically
                necessary services through the creation of bundled payment for OUD
                treatment services. We clarify that while the psychotherapy services
                described by CPT codes 90832 (Psychotherapy, 30 minutes with patient),
                90834 (Psychotherapy, 45 minutes with patient), 90837 (Psychotherapy,
                60 minutes with patient), and 90853 (Group psychotherapy (other than of
                a multiple-family group)) cannot be reported by the same practitioner
                for the same beneficiary in the same month as the codes describing this
                bundled episode of care, practitioners can bill for additional
                psychotherapy furnished for the treatment of OUD using the add-on code
                (HCPCS code G2088). In cases where psychotherapy services are furnished
                for co-occurring diagnoses, any of the psychotherapy codes could be
                billed, as medically reasonable and necessary. We note that
                practitioners should determine which of the patient's diagnoses they
                are treating is the primary one being treated during that session in
                order to decide whether it is appropriate to bill separately for
                psychotherapy services furnished for co-occurring diagnoses. After
                reflecting on these and other comments, we also believe it is important
                to modify our proposal to establish a requirement that at least one
                psychotherapy service must be furnished in order to bill for HCPCS
                codes G2086 or G2087. Since the new G codes incorporate the resource
                costs involved in furnishing psychotherapy services into the payment
                rate, we believe it is appropriate that a minimum of at least one
                psychotherapy service be furnished in order to bill for HCPCS codes
                G2086 or G2087. We note that not all OUD treatment necessarily require
                provision of regular psychotherapy services for all patients, for
                example for patients receiving MAT over a long period of time. In these
                cases, we note that existing coding describing care management services
                (CPT codes 99484, 99492, 99493, and 99494) and E/M services can be
                billed for treatment of substance use disorders, including OUD, so we
                do not believe that this requirement will inhibit access to OUD
                services.
                    Comment: A few commenters expressed concern that the proposed G
                codes will inappropriately limit access to a variety of evidence-based,
                non-opioid pain management therapies.
                    Response: We note that the proposed bundled payment codes would not
                preclude practitioners from furnishing or billing for other non-opioid
                pain management treatments.
                    In summary, after consideration of the comments, we are finalizing
                HCPCS codes G2086, G2087, and G2088 with modifications to establish a
                requirement that at least one psychotherapy service must be furnished
                in order to bill for HCPCS codes G2086 or G2087. We are clarifying that
                practitioners can bill for additional psychotherapy furnished for the
                treatment of OUD using the add-on code (HCPCS code G2088) and, in cases
                where psychotherapy services furnished are furnished for co-occurring
                diagnoses, for any of the psychotherapy codes, as medically reasonable
                and necessary.
                2. Rural Health Clinics (RHCs) and Federally-Qualified Health Centers
                (FQHCs)
                    In the CY 2018 PFS final rule (82 FR 53169 through 53180), we
                established payment for General Care Management (CCM) services using
                HCPCS G0511 which is an RHC and FQHC-specific G code for at least 20
                minutes of CCM, complex CCM, or general behavioral health services.
                Payment for this code is currently set at the average of the non-
                facility, non-geographically adjusted payment rates for CPT codes
                99490, 99487, 99491, and 99484. The types of chronic conditions that
                are eligible for care management services include mental health or
                behavioral health conditions, including substance use disorders.
                    In the CY 2018 PFS final rule with comment period (82 FR 53169
                through 53180), we also established payment for psychiatric
                Collaborative Care Services (CoCM) using HCPCS code G0512, which is an
                RHC and FQHC specific G-code for at least 70 minutes in the first
                calendar month, and at least 60 minutes in subsequent calendar months
                of psychiatric CoCM services. Payment for this code is set at the
                average of the non-facility, non-geographically adjusted rates for CPT
                codes 99492 and 99493. The psychiatric CoCM model of care may be used
                to treat patients with any behavioral health condition that is being
                treated by the billing practitioner, including substance use disorders.
                    RHCs and FQHCs can also bill for individual psychotherapy services
                using CPT codes 90791, 90792, 90832, 90834, 90837, 90839, or 90845,
                which are billable visits under the RHC all-inclusive rate (AIR) and
                FQHC Prospective Payment System (PPS) when furnished by an RHC or FQHC
                practitioner. If a qualified mental health service is furnished on the
                same day as a qualified primary care service, the RHC or FQHC can bill
                for 2 visits.
                    RHCs and FQHCs are engaged primarily in providing services that are
                furnished typically in a physician's office or an outpatient clinic. As
                a result of the bundled payment under the PFS for OUD treatment
                furnished by physicians, we reviewed the applicability of RHCs and
                FQHCs
                [[Page 62678]]
                furnishing and billing for similar services. Specifically, we
                considered establishing a new RHC and FQHC specific G code for OUD
                treatment with the payment rate set at the average of the non-facility,
                non-geographically adjusted payment rates for G2086 and G2087,
                beginning on January 1, 2020. The requirements to bill the services
                would be similar to the requirements under the PFS for G2086 and G2087,
                including that an initiating visit with a primary care practitioner
                must occur within one year before OUD services begin, and that consent
                be obtained before services are furnished.
                    However, because RHCs and FQHCs that choose to furnish OUD services
                can continue to report these individual codes when treating OUD, and
                can also offer their patients comprehensive care coordination services
                using HCPCS codes G0511 and G0512, we stated that we did not believe
                that adding a new and separate code to report a bundle of OUD services
                was necessary. Therefore, we did not propose to add a new G code for a
                bundle of OUD services.
                    We received public comments on our decision not to add a new G code
                for a bundle of OUD services furnished by RHCs and FQHCs. The following
                is a summary of the comments we received and our responses.
                    Comment: Commenters requested that we create a new G code for RHCs
                and FQHCs to bill for a bundle of OUD services. None of these comments
                were from an RHC or FQHC or a representative of RHCs or FQHCs.
                    Response: As we have noted, RHCs and FQHCs that provide OUD
                services to their patients can bill for individual psychotherapy
                services using a range of CPT codes that are billable visits under the
                RHC all-inclusive rate (AIR) and FQHC Prospective Payment System (PPS)
                when furnished by an RHC or FQHC practitioner. These codes can be
                billed on the same day as a qualified primary care visit, and RHCs and
                FQHCs can also bill for care management services and receive a payment
                in addition to their AIR or PPS payment. We did not receive any
                comments that lead us to conclude that a separate G code for RHCs and
                FQHCs to bill for OUD services is necessary, or any comments on how
                such a code would not be duplicative of existing billing mechanisms.
                    After considering the comments, we are finalizing our proposal not
                to establish a separate G code for OUD payments to RHCs and FQHCs. If
                we become aware that a separate code would be beneficial to RHCs and
                FQHCs that choose to furnish these services, we will again consider
                this.
                I. Physician Supervision for Physician Assistant (PA) Services
                1. Background
                    Section 4072(e) of the Omnibus Budget Reconciliation Act of 1986
                (Pub. L. 99-509, October 21, 1986), added section 1861(s)(2)(K)(i) of
                the Act to establish a benefit for services furnished by a physician
                assistant (PA) under the supervision of a physician. We have
                interpreted this physician supervision requirement in the regulation at
                Sec.  410.74(a)(2)(iv) to require PA services to be furnished under the
                general supervision of a physician. This general supervision
                requirement was based upon another longstanding regulation at Sec.
                410.32(b)(3)(i) that defines three levels of supervision for diagnostic
                tests, which are general, direct and personal supervision. Of these
                three supervision levels, general supervision is the most lenient.
                Specifically, the general supervision requirement means that PA
                services must be furnished under a physician's overall direction and
                control, but the physician's presence is not required during the
                performance of PA services.
                    In the CY 2018 PFS proposed rule (82 FR 34172 through 34173), we
                published a request for information (RFI) on CMS flexibilities and
                efficiencies. In response to this RFI, commenters including PA
                stakeholders informed us about recent changes in the practice of
                medicine for PAs, particularly regarding physician supervision. These
                commenters also reached out separately to CMS with their concerns. They
                stated that PAs are now practicing more autonomously, like nurse
                practitioners (NPs) and clinical nurse specialists (CNSs), as members
                of medical teams that often consist of physicians, nonphysician
                practitioners (NPPs) and other allied health professionals. This
                changed approach to the delivery of health care services involving PAs
                has resulted in changes to scope of practice laws in some states for
                PAs regarding physician supervision. According to these commenters,
                some states have already updated their requirements for PAs related to
                physician supervision, some states have made changes and are now silent
                about their physician supervision requirements, while other states have
                not yet changed their PA scope of practice in terms of their physician
                supervision requirements. Overall, these commenters believe that as
                states continue to make changes to their physician supervision
                requirements for PAs, the Medicare requirement for general supervision
                of PA services may become increasingly out of step with current medical
                practice, imposing a more stringent standard than state laws governing
                physician supervision of PA services. Furthermore, as currently
                defined, stakeholders have suggested that the supervision requirement
                is often misinterpreted or misunderstood in a manner that restricts
                PAs' ability to practice to the full extent of their education and
                expertise. The stakeholders have suggested that the current regulatory
                definition of physician supervision as it applies to PAs could
                inappropriately restrict the practice of PAs in delivering their
                professional services to the Medicare population.
                    We note that we have understood our current policy to require
                general physician supervision for PA services to fulfill the statutory
                physician supervision requirement; and we believe that general
                physician supervision gives PAs flexibility to furnish their
                professional services without the need for a physician's physical
                presence or availability. Nonetheless, we appreciate the concerns
                articulated by stakeholders. To more fully understand the current
                landscape for medical practice involving PA services and how the
                current regulatory definition may be problematic, we invited public
                comments on specific examples of changes in state law and state scope
                of practice rules that enable PAs to practice more broadly such that
                those rules are in tension with the Medicare requirement for general
                physician supervision of PA services that has been in place since the
                inception of the PA benefit category under Medicare law.
                    Given the commenters' understanding of ongoing changes underway to
                the state scope of practice laws regarding physician supervision of PA
                services, commenters on our CY 2018 RFI have requested that CMS
                reconsider its interpretation of the statutory requirement that PA
                services must be furnished under the supervision of a physician to
                allow PAs to operate similarly to NPs and CNSs, who are required by
                section 1861(s)(2)(K)(ii) of the Act to furnish their services ``in
                collaboration'' with a physician. In general, we have interpreted
                collaboration for this purpose at Sec. Sec.  410.75(c)(3) and
                410.76(c)(3) of our regulations to mean a process in which an NP or CNS
                (respectively) works with one or more physicians to deliver health care
                services within the scope of the practitioner's expertise, with medical
                direction and appropriate supervision as provided by state law in which
                the services are performed. The commenters stated that allowing PA
                services to be furnished using such a collaborative
                [[Page 62679]]
                process would offer PAs the flexibility necessary to deliver services
                more effectively under today's health care system in accordance with
                the scope of practice in the state(s) where they practice, rather than
                being limited by the system that was in place when PA services were
                first covered under Medicare Part B over 30 years ago.
                2. Summary of Proposal and Final Provisions
                    After considering the comments we received on the RFI, as well as
                information we received regarding the scope of practice laws in some
                states regarding supervision requirements for PAs, we proposed to
                revise the regulation at Sec.  410.74 that establishes physician
                supervision requirements for PAs. Specifically, we proposed to revise
                Sec.  410.74(a)(2) to provide that the statutory physician supervision
                requirement for PA services at section 1861(s)(2)(K)(i) of the Act
                would be met when a PA furnishes their services in accordance with
                state law and state scope of practice rules for PAs in the state in
                which the services are furnished, with medical direction and
                appropriate supervision as required by state law in which the services
                are performed. In the absence of state law governing physician
                supervision of PA services, the physician supervision required by
                Medicare for PA services would be evidenced by documentation in the
                medical record of the PA's approach to working with physicians in
                furnishing their services. Consistent with current rules, such
                documentation would need to be available to CMS, upon request. This
                change would substantially align the regulation on physician
                supervision for PA services at Sec.  410.74(a)(2) with our current
                regulations on physician collaboration for NP and CNS services at
                Sec. Sec.  410.75(c)(3) and 410.76(c)(3). We continue to engage with
                key stakeholders on this issue and receive information on the expanded
                role of NPPs as members of the medical team. As we are informed about
                transitions in state law and scope of practice governing physician
                supervision, as well as changes in the way that PAs practice, we
                acknowledge the state's role and autonomy to establish, uphold, and
                enforce their state laws and PA scope of practice requirements to
                ensure that an appropriate level of physician oversight occurs when PAs
                furnish their professional services to Medicare Part B patients. Our
                policy on this issue largely defers to state law and scope of practice
                and enables states the flexibility to develop requirements for PA
                services that are unique and appropriate for their respective state,
                allowing the states to be accountable for the safety and quality of
                health care services that PAs furnish.
                    We received public comments on the proposed physician supervision
                PA services provisions. The following is a summary of the comments we
                received and our responses.
                    Comment: The majority of commenters supported our proposal overall,
                to the extent that it considers state law and scope of practice rules
                for the state in which the services are furnished, to largely conform
                our interpretation of the statutory physician supervision requirement
                for PA services as interpreted under regulations at Sec.  410.74(a)(2)
                with the statutory physician collaboration requirement for NP and CNS
                services as interpreted under regulations at Sec. Sec.  410.75(c)(3)
                and 410.76(c)(3). Commenters indicated that aligning the physician
                supervision requirement for PA services with the physician
                collaboration requirement for NPs and CNSs would reduce practical
                differences in PA and NP/CNS utilization for employers, employees,
                States and even Medicare patients. They stated that deferring to state
                law and scope of practice rules for supervision of PA services will
                enable PAs to practice at the top of their education and expertise, and
                therefore, assist the State in which they practice with meeting its
                healthcare workforce needs, particularly in states that include remote
                rural and underserved areas. These commenters noted that PAs are
                authorized to provide medical and surgical care in all 50 States and
                the District of Columbia, and are committed to increasing access to
                high quality care for all, as well as continuity of care under the
                changing landscape of healthcare in the U.S. Commenters from 20 States
                provided evidence of changes in their state laws or scope of practice
                rules to move away from references to ``physician supervision'' of PAs,
                and in some cases replacing it with the term, ``physician
                collaboration'' to describe the PA-physician relationship. Commenters
                reported such changes in laws and rules for PA supervision in Arizona,
                California, Colorado, Connecticut, Florida, Idaho, Illinois,
                Massachusetts, Michigan, Missouri, Montana, Nevada, North Dakota,
                Oregon, Oklahoma, Rhode Island, South Carolina, Texas, Utah, and
                Virginia. PA commenters practicing in Kansas, Vermont and Wisconsin
                indicated that their state laws and scope of practice rules are
                currently undergoing similar changes that should be effective in 2020
                or shortly thereafter. Additionally, these commenters supported CMS'
                efforts to reduce practice burdens on PAs and to develop regulations
                for the Medicare program that closely align with the transition in
                state laws and scope of practice rules for PAs regarding physician
                supervision. These commenters also noted that the changes being made to
                state laws and scope of practice rules were recommended by the December
                2018 Federal government report on healthcare competition entitled,
                ``Reforming America's Healthcare System Through Choice and
                Competition'' available at https://www.hhs.gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition.pdf. The commenters directed our attention to the specific
                recommendation in the report that states should consider eliminating
                requirements for rigid collaborative practice and supervision
                agreements that are not justified by legitimate health and safety
                concerns to ensure continuity of care for American healthcare
                consumers.
                    Response: We appreciate the commenters' recognition of our efforts
                to reduce burden on PA practice given the changes in their professional
                practice since the inception of the Medicare Part B benefit category
                for PAs under Medicare law. We also appreciate the commenters' support
                of our proposal to consider state law and scope of practice rules
                governing PA supervision as an appropriate measure by which to ensure
                that the physician supervision requirement for PA services under
                Medicare statute at section 1861(s)(K)(i) of the Act is met. We
                particularly appreciate the feedback from commenters citing changes
                that have already been made to state laws and scope of practice rules
                to address evolution in PA practice. These comments are very helpful to
                inform our broader understanding of the current healthcare landscape
                for PAs, and to ensure that the statutory PA physician supervision
                requirement continues to be met.
                    Comment: Many commenters who supported our proposal to the extent
                that it relates to state law and scope of practice rules for physician
                supervision of PA services disagreed with our proposal to address
                situations where states are silent about their scope of practice
                requirements for physician supervision of PA services. Specifically,
                these commenters urged us to require that, in the absence of state law
                governing physician supervision of PA services, PAs should be required
                to document at the practice level, rather than in the medical record,
                the working relationship that they have with physicians. The commenters
                expressed
                [[Page 62680]]
                concern that requiring PAs to document their approach in the medical
                record for every patient that they treat would be a tremendous
                administrative burden that would have a significantly adverse impact on
                the PA's ability to deliver care. A few commenters suggested that there
                should not be a requirement for PAs to document the relationship with
                any supervising or collaborating physician in every patient chart
                because such documentation is already provided as part of the practice
                protocols for PAs that are maintained by the individual State boards of
                medicine. Furthermore, some commenters recommended that, in the absence
                of state law addressing physician supervision of PA services,
                documentation at the practice of the working relationship that PAs have
                with physicians should be required to address situations where PAs deal
                with issues outside their scope of practice.
                    Response: We are clarifying that it is not our intention to create
                an overly burdensome and unnecessary administrative documentation
                requirement governing PA physician supervision that results in a
                hindrance to PA practice. We believe that, in the absence of state law,
                if there is documentation at the practice which demonstrates the
                working relationship that PAs have with physicians in furnishing their
                professional services, then this would be adequate to ensure that the
                statutory requirement for PA physician supervision is met. However, we
                believe that in the absence of state law and scope of practice rules
                governing physician supervision of PAs, the relationship that PAs have
                with physicians in their practice should be required and documented at
                the practice for all services that PAs furnish, not solely for services
                outside their scope of practice.
                    Comment: One commenter suggested that the PA physician supervision
                requirement and the NP and CNS physician collaboration requirement
                should be totally removed so that these health care professionals are
                not tethered to a physician in any way. This commenter further
                suggested that the removal of a physician supervision requirement would
                enable PAs to be able to bill the Medicare program directly for their
                services like NPs and CNSs, rather than having their services billed by
                their employer as they currently are.
                    Response: The Medicare statute sets forth the requirements for
                physician supervision of PA services and the requirement for physician
                collaboration for NP and CNS services. As such, we do not have
                authority to remove those requirements. Additionally, our regulation at
                Sec.  410.150(b)(15), which is based on the statutory requirements of
                section 1842(b)(6)(C)(i) of the Act governing payment for PA services
                requires that a PA's employer or independent contractor must bill the
                Medicare program for PA services. Accordingly, we are not making
                changes to requirements for Medicare Part B payment for PA professional
                services in this final rule.
                    Comment: Some commenters opposed the proposal overall, and
                particularly the standard CMS proposed to address the PA physician
                supervision requirement in the absence of state law and scope of
                practice rules. These commenters stressed that by just substituting
                ``physician supervision'' with ``physician collaboration,'' the
                proposal fails to meet the statutory physician supervision requirement
                and instead relies on unnecessary variations in standards of care based
                on differences in state law that are inappropriate for a federal
                program. These commenters stated that the PA educational curricula are
                not tailored to developing the responsibilities of PAs to perform all
                medical services and procedures such as ordering appropriate diagnostic
                tests and performing highly technical radiology procedures without
                physician oversight and direction. They believe that physician
                involvement, either through the physical presence of a physician or
                availability via telecommunications technology, was necessary to ensure
                that optimal patient care is not compromised. Additionally, these
                commenters alluded to high-profile lawsuits against provider
                organizations in the last year involving PA documentation and billing
                policy where audits revealed documentation and signature challenges for
                electronic medical records (EMR) systems in determining whether
                physician supervision had occurred, and in distinguishing work
                furnished by a physician, PA or other supplier involved in a patient's
                care. They suggested that these same obstacles could potentially apply
                to our proposed medical record documentation standard for PAs to
                demonstrate, in the absence of state law, the relationship that they
                have with physicians when furnishing their services. Overall, these
                commenters stated that the current requirement we established in
                regulation for a general level of physician supervision to meet the
                statutory physician supervision requirement for PA services is
                appropriately consistent with state laws, and enables physicians to
                maintain the ultimate responsibility for managing patient care without
                preempting state law and scope of practice rules or inadvertently
                eliminating any physician oversight of PA services. Accordingly, these
                commenters urged CMS to maintain the current regulatory standard for
                general physician supervision of PA services as a clearer standard for
                physician supervision across-the-board for the Medicare program, and
                consistent with statutory requirements.
                    Response: We appreciate the concerns that these commenters raised
                about our proposal and acknowledge that the statutory requirement for
                physician supervision of PA services remains in effect. Further, we
                believe it is appropriate for the Medicare program to recognize and
                consider the role of states in regulating medical practice and their
                autonomy to establish, uphold, and enforce their laws and PA scope of
                practice requirements that are uniquely appropriate for their
                respective states, just as we ensure that there is appropriate
                physician supervision of PA services, consistent with the requirement
                under Medicare law. Additionally, we believe that the commenters'
                concerns about obstacles for EMR systems to determine whether physician
                supervision occurred will be mitigated by our decision, as described
                above, to require in the absence of state law addressing physician
                supervision of PA services that PAs must document at the practice,
                rather than in the medical record, their relationship with physicians
                when furnishing their professional services.
                    Comment: Some of the commenters who opposed our proposal to require
                that PAs must document how they handle physician supervision of their
                services in the absence of state law recommended that we remove the
                documentation standard as proposed and replace it with a standard that
                imposes a requirement that PAs work within a health care team led by a
                physician, given that they believe no state allows PAs to practice
                independently without any physician supervision or collaboration.
                    Response: We appreciate this suggestion about how to ensure that
                physician supervision of PA services occurs in states that are silent
                about this requirement in their laws or scope of practice requirements
                for PA professional services. However, we disagree with the commenters'
                suggestion that, where state law or scope of practice requirements do
                not address physician supervision of PA services, we should not adopt
                the proposed requirement that PAs document their approach to working
                with physicians. We believe it is
                [[Page 62681]]
                important to continue to ensure that the statutory requirement for
                physician supervision of PA services is met. We also disagree with the
                commenters' suggestion that we should impose specific requirements that
                PAs must practice as part of a physician-led health care team. Based on
                information provided by other commenters, it seems clear that the way
                PAs practice is evolving, and that state laws and scope of practice
                rules are being modified to embrace that change. We believe our role
                and responsibility is to ensure continued compliance with Medicare
                statutory requirements without placing undue limitations on changes in
                PA medical practice. As such, we will recognize and consider state law
                and scope of practice rules principally to ensure that physician
                supervision occurs without mandating under our regulations that PAs
                work within a health care team led by a physician.
                    Comment: Commenters posed various questions about PA services that
                are outside the scope the proposals we included in the CY 2020 PFS
                proposed rule. These comments pertained to issues such as PA
                supervision requirements for both SAMHSA-designated physicians and PAs
                when furnishing medically-assisted treatment (MAT) services to patients
                with opioid use disorder; physician supervision requirements for PAs
                when furnishing services in PA-directed rural health clinics; hospice
                physician supervision requirements for PAs and the presence of hospice
                Medical Directors; extending the same considerations for PA physician
                supervision requirements to pharmacists when furnishing their services
                incident to the professional services of physicians; and, the Medicare
                payment implications under this proposal for PA services.
                    Response: We did not propose changes to the regulations regarding
                PA services other than the provision that generally addresses the
                statutory requirement for physician supervision of PA services.
                Therefore, we are not addressing these other issues in this final rule.
                    After considering the public comments, we are finalizing our
                proposal on PA physician supervision, with modifications as described
                above, to require under Sec.  410.74(a)(2) the following:
                     That a PA must furnish their professional services in
                accordance with state law and state scope of practice rules for PAs in
                the state in which the PA's professional services are furnished. Any
                state laws or state scope of practice rules that describe the required
                practice relationship between physicians and PAs, including explicit
                supervisory or collaborative practice requirements, describe a form of
                supervision for purposes of section 1861(s)(2)(K)(i) of the Act.
                     For states with no explicit state law or scope of practice
                rules regarding physician supervision of PA services, physician
                supervision is a process in which a PA has a working relationship with
                one or more physicians to supervise the delivery of their health care
                services. Such physician supervision is evidenced by documenting at the
                practice level the PA's scope of practice and the working relationships
                the PA has with the supervising physician/s when furnishing
                professional services.
                J. Review and Verification of Medical Record Documentation
                1. Background
                    In an effort to reduce mandatory and duplicative medical record
                evaluation and management (E/M) documentation requirements, we
                finalized an amended regulatory provision at 42 CFR part 415, subpart
                D, in the CY 2019 PFS final rule (83 FR 59653 through 59654).
                Specifically, Sec.  415.172(a) requires as a condition of payment under
                the PFS that the teaching physician (as defined in Sec.  415.152) must
                be present during certain portions of services that are furnished with
                the involvement of residents (individuals who are training in a
                graduate medical education program). Section 415.174(a) provides for an
                exception to the teaching physician presence requirements in the case
                of certain E/M services under certain conditions, but requires that the
                teaching physician must direct and review the care provided by no more
                than four residents at a time. Sections 415.172(b) and 415.174(a)(6),
                respectively require that the teaching physician's presence and
                participation in services involving residents must be documented in the
                medical record. We amended these regulations to provide that a
                physician, resident, or nurse may document in the patient's medical
                record that the teaching physician presence and participation
                requirements were met. As a result, for E/M visits furnished beginning
                January 1, 2019, the extent of the teaching physician's participation
                in services involving residents may be demonstrated by notes in the
                medical records made by a physician, resident, or nurse.
                    For the same burden reduction purposes, we issued Change Request
                (CR) 10412, Transmittal 3971 https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R3971CP.pdf on February 2,
                2018, which revised a paragraph in our manual instructions on
                ``Teaching Physician Services'' at Pub. 100-04, Medicare Claims
                Processing Manual, Chapter 12, Section 100.1.1B., to reduce duplicative
                documentation requirements by allowing a teaching physician to review
                and verify (sign/date) notes made by a student in a patient's medical
                record for E/M services, rather than having to re-document the
                information, largely duplicating the student's notes. We issued
                corrections to CR 10412 through Transmittal 4068 https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R4068CP.pdf and re-issued the CR on May 31, 2018. Pub. 100-04, Medicare
                Claims Processing Manual, Chapter 12, Section 100 contains a list of
                definitions pertinent to teaching physician services.
                    Following these amendments to our regulations and manual, certain
                stakeholders raised concerns about the definitions in this section,
                particularly those for teaching physician, student, and documentation;
                and when considered in conjunction with the interpretation of the
                manual provision at Pub. 100-04, Medicare Claims Processing Manual,
                Chapter 12, Section 100.1.1B., which addresses documentation of E/M
                services involving students. While there is no regulatory definition of
                student, the manual instruction defines a student as an individual who
                participates in an accredited educational program (for example, a
                medical school) that is not an approved graduate medical education
                (GME) program. The manual instructions also specify that a student is
                never considered to be an intern or a resident, and that Medicare does
                not pay for services furnished by a student (see Section 100.1.1B. for
                a discussion concerning E/M service documentation performed by
                students).
                    As stated in the CY 2020 PFS proposed rule, we are aware that
                nonphysician practitioners (NPPs) who are authorized under Medicare
                Part B to furnish and be paid for all levels of E/M services are
                seeking similar relief from burdensome E/M documentation requirements
                that would allow them to review and verify medical record notes made by
                their students, rather than having to re-document the information.
                These NPPs include nurse practitioners (NPs), clinical nurse
                specialists (CNSs), and certified nurse-midwives (CNMs), collectively
                referred to hereafter for purposes of this discussion as advanced
                practice registered nurses (APRNs), as well as physician assistants
                (PAs). Subsequent to the publication of the CY
                [[Page 62682]]
                2019 PFS final rule (83 FR 59653 through 59654), through feedback from
                listening sessions hosted by CMS' Documentation Requirements
                Simplification workgroup, we began to hear concerns from a variety of
                stakeholders about the requirements for teaching physician review and
                verification of documentation added to the medical record by other
                individuals. Physician and NPP stakeholders expressed concern about the
                scope of the changes to Sec. Sec.  415.172(b) and 415.174(a)(6) which
                authorize only a physician, resident, or nurse to include notes in the
                medical record to document E/M services furnished by teaching
                physicians, because they believed that students and other members of
                the medical team should be similarly permitted to provide E/M medical
                record documentation. In addition to students, these stakeholders
                indicated that ``other members of the medical team'' could include
                individuals who the teaching physician, other physicians, PA and APRN
                preceptors designate as being appropriate to document services in the
                medical record, which the billing practitioner would then review and
                verify, and rely upon for billing purposes.
                    Subsequent to the publication of the student documentation manual
                instruction change at section 100.1.1B of the Medicare Claims
                Processing Manual, representatives of PAs and APRNs requested
                clarification about whether PA and APRN preceptors and their students
                were subject to the same E/M documentation requirements as teaching
                physicians and their medical students. These stakeholders suggested
                that the reference to ``student'' in the manual instruction on E/M
                documentation provided by students is ambiguous because it does not
                specify ``medical student''. These stakeholders also suggested that the
                definition of ``student'' in section 100 of this manual instruction is
                ambiguous because PA and APRN preceptors also educate students who are
                individuals who participate in an accredited educational program that
                is not an approved GME program. Accordingly, these stakeholders
                expressed concern that the uncertainty throughout the health care
                industry, including among our contractors, concerning the student E/M
                documentation review and verification policy under these manual
                guidelines results in unequal treatment as compared to teaching
                physicians. The stakeholders stated that depending on how the manual
                instruction is interpreted, PA and APRN preceptors may be required to
                re-document E/M services in full when their students include notes in
                the medical records, without having the same option that teaching
                physicians do to simply review and verify medical student
                documentation.
                2. Proposed Provisions and Summaries of and Responses to Public
                Comments
                    After considering the concerns expressed by these stakeholders, we
                noted in the CY 2020 PFS proposed rule that we believe it would be
                appropriate to provide broad flexibility to the physicians, PAs and
                APRNs (regardless of whether they are acting in a teaching capacity)
                who document and who are paid under the PFS for their professional
                services. Therefore, we proposed to establish a general principle to
                allow the physician, the PA, or the APRN who furnishes and bills for
                their professional services to review and verify, rather than re-
                document, information included in the medical record by physicians,
                residents, nurses, students or other members of the medical team. We
                explained that this principle would apply across the spectrum of all
                Medicare-covered services paid under the PFS. We noted that because the
                proposal is intended to apply broadly, we proposed to amend regulations
                for teaching physicians, physicians, PAs, and APRNs to add this new
                flexibility for medical record documentation requirements for
                professional services furnished by physicians, PAs and APRNs in all
                settings.
                    Specifically, to reflect our simplified and standardized approach
                to medical record documentation for all professional services furnished
                by physicians, PAs and APRNs paid under the PFS, we proposed to amend
                Sec. Sec.  410.20 (Physicians' services), 410.74 (PA services), 410.75
                (NP services), 410.76 (CNS services) and 410.77 (CNM services) to add a
                new paragraph entitled, ``Medical record documentation.'' We noted that
                this paragraph would specify that, when furnishing their professional
                services, the clinician may review and verify (sign/date) notes in a
                patient's medical record made by other physicians, residents, nurses,
                students, or other members of the medical team, including notes
                documenting the practitioner's presence and participation in the
                services, rather than fully re-documenting the information. We also
                noted that, while the proposed change addresses who may document
                services in the medical record, subject to review and verification by
                the furnishing and billing clinician, it would not modify the scope of,
                or standards for, the documentation that is needed in the medical
                record to demonstrate medical necessity of services, or otherwise for
                purposes of appropriate medical recordkeeping.
                    We also proposed to make conforming amendments to Sec. Sec.
                415.172(b) and 415.174(a)(6) to also allow physicians, residents,
                nurses, students, or other members of the medical team to enter
                information in the medical record that can then be reviewed and
                verified by a teaching physician without the need for re-documentation.
                    We received public comments on the proposed Review and Verification
                of Medical Record Documentation provisions. The following is a summary
                of the comments we received and our responses.
                    Comment: Many commenters supported the premise for this
                documentation proposal which they stated almost unanimously would
                relieve burdensome documentation requirements for PAs, NP, CNSs, and
                CNMs who are authorized providers under Medicare Part B in that it
                would minimize ``note bloat'' and clinician burnout, and would allow
                clinicians to focus their limited time instead on patient care. The
                commenters stated that enabling physicians other than teaching
                physicians, PAs and APRNs who furnish and bill for their professional
                services to review and verify, rather than re-document information
                included in the medical record by physicians, residents, nurses,
                students or other members of the medical team is forward-thinking,
                reflective of the professional healthcare setting and, it eliminates
                disparities in clinical training opportunities so that a student's
                experience ranks more than shadowing. The commenters noted that
                recognizing PA and APRN preceptors in the same manner as teaching
                physicians regarding student medical record documentation would advance
                access to quality care for Medicare beneficiaries particularly in rural
                and underserved areas by granting clinical training opportunities to PA
                and APRN students. Additionally, these commenters expressed support for
                this documentation proposal because they believed it would remove the
                disparity in burden reduction between physicians and clinicians such as
                PAs and APRNs and, instead would lead to parity for all suppliers of
                Medicare services paid under the PFS. The commenters also noted that
                another advantage of these documentation requirements is that they will
                lead to electronic health records (EHRs) being less cluttered with
                repetitive notes of little additional clinical use, making more
                meaningful
                [[Page 62683]]
                information easier for physicians and clinicians to identify while
                offering greater certainty to medical team members and Medicare
                Administrative Contractors (MACs) alike.
                    Response: We appreciate the insight provided by commenters about
                how the broad flexibility under our proposal would enhance the clinical
                training opportunities and experience for other physicians, PAs, APRNs
                and their students while still maintaining the integrity of the
                information documented in the medical record as it is reviewed and
                verified by the billing practitioner.
                    Comment: A commenter supported the merit of the broad flexibility
                provided under the medical record documentation proposal and suggested
                that we could improve our proposal by including certified registered
                nurse anesthetists (CRNAs) and their students under this proposal
                because CRNAs are also included under the nursing industry's ``APRN''
                umbrella. The commenter pointed out that the proposal currently
                includes NPs, CNSs and CNMs, which are three out of the four categories
                of APRNs. However, this commenter stated that CRNAs should also be
                included under this proposal, because not only are CRNAs considered
                APRNs, they are also authorized by Medicare to furnish and bill for E/M
                services and all medically necessary services within their state scope
                of practice. CRNAs regularly complete comprehensive E/M documentation
                for patients, which is also well within their scope of practice.
                Accordingly, the commenter believed that since this criterion was a
                factor in proposing the medical record documentation policy for PAs,
                NPs, CNSs and CNMs, CRNAs should be included under this policy.
                    Response: We appreciate the commenter bringing to our attention
                that CRNAs are another type of clinical nurse that the nursing industry
                recognizes as an APRN, and that the commenter believed should be
                included under this medical record documentation proposal. The
                regulations at Sec.  410.69 interpret the statutory CRNA benefit
                category at section 1861(bb)(1) of the Act to authorize Medicare Part B
                payment to CRNAs for anesthesia services and related care that CRNAs
                are legally authorized to perform by the state in which the services
                are furnished. We also acknowledge that some states license CRNAs to
                furnish E/M services as part of the ``related care'' services
                authorized under their Medicare Part B benefit category. Upon further
                reflection, we agree that it is appropriate to include CRNAs and their
                students, as well as other members of their health care team, for
                purposes of the medical record documentation proposal.
                    Comment: Several commenters suggested that CMS specifically name
                the types of students that it intends to include as those who are
                eligible to make notes in the medical record documentation in order to
                avoid unnecessary confusion by obscuring the intended scope of students
                as ``other members of the medical team.'' These commenters stated that
                explicitly naming the types of clinicians and students for which the
                documentation they add can be reviewed and verified by the billing
                professional would eliminate misinterpretation on the part of health
                systems, care providers, and educators, and would improve both clinical
                training opportunities and, ultimately, patient care.
                    Response: We acknowledge that uncertainty in the healthcare
                industry and for MACs about the specific types of students who were
                allowed to make notes in the medical record which teaching physicians
                could review and verify without re-documenting was a factor we
                considered in proposing to revise the documentation requirements in the
                CY 2020 PFS proposed rule. We find the comment to be persuasive
                regarding the need for us to be more explicit regarding the flexibility
                we intend to establish for other physicians, PAs and APRNs and their
                students. Given that the initial impetus for our proposal was to
                address potential confusion about our reference in a manual provision
                to ``students,'' we would not want to generate any further potential
                for confusion with this policy. In making our proposal, we referred not
                only to medical students, but more broadly to students in the
                disciplines of the clinicians who are authorized to bill the Medicare
                program for a broad spectrum of health care services, including all
                level E/M services. We agree with the commenters that it is important
                to be clear about the scope of this policy and, therefore, we will
                modify our proposal to explicitly list the types of students for which
                the medical records documentation policy applies rather than using a
                generic reference to ``students.'' Therefore, at Sec. Sec.  410.20,
                410.69, 410.74, 410.75, 410.76 and 410.77, we will modify our proposed
                amendments to the regulation to specify the types of students who may
                make notes in the medical record that may then be reviewed and
                verified, rather than re-documented, by the billing clinician.
                    Comment: Several commenters suggested that CMS specify that
                physicians, PAs, and APRNs may sign off on only those notes in the
                medical record made by someone of their same provider type or
                discipline. For example, a PA may only review and verify information
                included in a patient's chart by another PA or PA student. One of these
                commenters stated that CMS should withhold any documentation
                requirement changes until the agency establishes guidelines in future
                rulemaking that clarify the circumstances under which a clinician would
                be permitted to review and verify medical record documentation.
                Conversely, a few of these same commenters questioned the proposal and
                stated that it is unclear whether a PA or APRN can sign off on any
                resident or student documentation regardless of their credential level.
                For example, a PA would be able to attest and bill for work that was
                performed by a senior resident who is training to become a medical
                doctor. A few of these commenters warned that scope of practice laws
                may impose documentation requirements that lead to physicians and
                clinicians only reviewing documentation of their own student types and
                not that of other disciplines. Furthermore, the commenters stated that
                the teaching physician services requirements do not permit PAs and
                APRNs to formally act as teaching physicians.
                    Response: We did not propose any limitations that would restrict a
                billing professional to only reviewing and verifying documentation in
                the medical record entered by health care team members practicing or
                training within their same specialty or discipline. We believe that
                this type of limitation on our proposal would defeat our intended
                purpose to provide broad flexibility, establishing a generalized
                principle for medical record documentation for all professional
                services paid under the Medicare PFS in all settings. Therefore, we
                disagree with the commenters' recommendation, and are not finalizing
                restrictions on the scope of medical record documentation entered by
                members of the medical team that can be reviewed and verified by the
                billing professional. Additionally, our documentation proposal does not
                address any applicable billing or payment requirements for the work or
                services that others furnish in connection with the professional
                services that are billed by teaching physicians, other physicians, PAs
                or APRNs. Rather, our proposal is limited to addressing who is
                authorized, for purposes of the Medicare program, to review and verify
                documentation in the medical record entered by certain individuals,
                without having to re-document the information.
                [[Page 62684]]
                    Comment: Similarly, several commenters representing physicians
                supported making the proposed changes to medical record documentation
                requirements for physicians only, and not for PAs and APRNs. They
                stated that only physicians submitting a claim for services are
                responsible and appropriately trained to review and verify
                documentation in the medical record provided by physicians, residents,
                nurses, students, or other members of the medical team across the
                spectrum of all Medicare-covered services paid under the PFS. They
                maintained that safeguards must be in place to ensure the medical
                record includes accurate documentation of clinical findings,
                treatments, and ongoing care plans by all members of the medical team.
                    Response: We note that the billing professional, in submitting a
                claim to Medicare for services paid under the PFS, is responsible for
                the accuracy of the information included on that claim. While we
                appreciate the perspective of these commenters, stakeholders and other
                commenters have made it clear to us that the role of PAs and APRNs has
                changed to the point that our current regulations present an unintended
                burden for billing practitioners, unnecessarily requiring them to re-
                document information entered into the medical record by physicians,
                residents, nurses, students, and other members of the medical team when
                it would be sufficient for them to simply review and verify it.
                Therefore, we are not establishing a requirement in this final rule
                that only a billing physician may review and verify documentation in
                the medical record added by physicians, residents, nurses, students,
                and other members of the medical team.
                    Comment: Commenters requested clarification about whether multiple
                students and residents can enter documentation into the medical record
                on the same day and during the same office visit. One commenter stated
                that, currently, MACs or auditing agencies will deny PA or APRN
                services when furnished on the same day as a service billed by a
                physician regardless of the physician's specialty.
                    Response: We appreciate the information and suggestion provided by
                these commenters. We did not propose a limitation on how many members
                of the medical team can enter information in the medical record for a
                given date of service or patient encounter, and do not believe such a
                limitation is warranted. We did not address the scope of services that
                can be billed for a patient on the same date of service. Therefore,
                this aspect of the comment is outside the scope of the proposed rule
                and we will not address it in this final rule.
                    Comment: Several commenters encouraged CMS to re-examine the
                current requirements regarding documentation of the billing
                practitioner's physical presence and participation in certain E/M
                services and procedures. The commenters stated that this physical
                presence and participation requirement results in significant burden
                for teaching physicians and PA and APRN preceptors when their students
                are participating in patient care. These commenters stated that while
                physical presence and participation of physicians and practitioners in
                the clinic is critical for safe patient care, presence in the
                examination room during documentation is onerous and unnecessary. The
                commenters also noted that this requirement greatly diminishes the
                learning experience for students, as they do not develop the ability to
                think or operate independently, formulate diagnoses, and generate
                treatment plans, producing less experienced graduate clinicians who are
                not as prepared as they could be to provide care on their own.
                    Response: We did not propose any changes to requirements pertaining
                to the documentation of physical presence and participation for certain
                E/M services and procedures at Sec. Sec.  415.172 and 415.174, and we
                are not addressing these requirements in this final rule.
                    Comment: A commenter questioned whether this proposal recognizes
                ``scribes'' other than a medical assistant or a registered nurse for
                purposes of entering notes in a patient's medical record. The commenter
                defined a scribe as an independent individual assisting a single care
                provider, and expressed concern that utilizing clinical support staff
                as a scribe to document services will lead to dissatisfaction of
                employees and loss of clinical support staff, which would adversely
                affect the shortage in clinical support staff that already exists.
                Likewise, a commenter suggested that CMS should explicitly include
                dieticians and nutritionists among the other members of the medical
                team who are eligible to enter notes in the medical record.
                    Response: We proposed broad flexibility for teaching physicians,
                other physicians, PAs and APRNs to use their discretion in identifying,
                for each particular case, the individuals who are serving as members of
                the medical team, potentially including scribes, dieticians,
                nutritionists, or other members of their medical team. Although we are
                modifying our proposal to clarify the scope of students that may be
                considered members of the medical team for purposes of this
                documentation policy as explained above, we intentionally did not
                propose to specify who can be included as a member of the medical team.
                    Comment: One commenter questioned whether their assumption is
                correct that this proposal applies to all types of services (that is,
                procedures, E/M services, and diagnostic services).
                    Response: The commenter's assumption is accurate; our proposed
                medical record documentation policy would apply broadly to all services
                of physicians, PAs and APRNs, regardless of the type of service (E/M,
                procedure, diagnostic test) or the setting in which the service is
                furnished.
                    Comment: We received a number of comments that were outside the
                scope of the CY 2020 PFS proposed rule.
                    Response: We appreciate and will consider these comments for other
                purposes including possible future rulemaking.
                    After considering the comments, we are finalizing our proposal with
                a couple of modifications. We are explicitly naming PA and NP, CNS, CNM
                and CRNA students as APRN students, along with medical students, as the
                types of students who may document notes in a patient's medical record
                that may be reviewed and verified rather than re-documented by the
                billing professional; and revising Sec. Sec.  410.20, 410.69, 410.74,
                410.75, 410.76, 410.77, 415.172 and 415.174 to reflect this change.
                Additionally, similar to the revisions we are making to the regulations
                at Sec. Sec.  410.20, 410.69, 410.74, 410.75, 410.76, 410.77, 415.172
                and 415.174, we are amending our regulation at Sec.  410.69 to add a
                new paragraph (5) under the definition of CRNA to include CRNAs as a
                category of APRNs for purposes of this policy, and to include CRNA
                students under the reference to APRN students.
                K. Care Management Services
                1. Background
                    In recent years, we have updated PFS payment policies to improve
                payment for care management and care coordination. Working with the CPT
                Editorial Panel and other clinicians, we have expanded the suite of
                codes describing these services. New CPT codes were created that
                distinguish between services that are face-to-face; represent a single
                encounter, monthly service or both; are timed services; represent
                primary care versus specialty care; address specific conditions; and
                represent the work of the billing
                [[Page 62685]]
                practitioner, their clinical staff, or both (see Table 19). Additional
                information regarding recent new codes and associated PFS payment rules
                is available on our website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management.html.
                [GRAPHIC] [TIFF OMITTED] TR15NO19.026
                    Based on our review of the Medicare claims data we estimate that
                approximately 3 million unique beneficiaries (9 percent of the Medicare
                fee-for-service (FFS) population) receive these services annually, with
                higher use of chronic care management (CCM), transitional care
                management (TCM), and advance care planning (ACP) services. We believe
                gaps remain in coding and payment, such as for care management of
                patients having a single, serious, or complex chronic condition. In
                this final rule, we continue our ongoing work in this area through code
                set refinement related to TCM services and CCM services, in addition to
                new coding for principal care management (PCM) services, and addressing
                chronic care remote physiologic monitoring (RPM) services.
                2. Transitional Care Management (TCM) Services
                    Utilization of TCM services has increased each year since CMS
                established coding and began paying separately for TCM services. There
                were almost 300,000 TCM professional claims during 2013, the first year
                of TCM services, and almost 1.3 million professional claims during
                2018, the most recent year of complete claims data. However, a recent
                analysis of TCM claims data by Bindman and Cox \81\ found that use of
                TCM services is low when compared to the number of Medicare
                beneficiaries with eligible discharges. Bindman and Cox noted that the
                beneficiaries who received TCM services demonstrated reduced
                readmission rates, lower mortality, and decreased health care costs.
                Based upon these findings, we believe that increasing utilization of
                medically necessary TCM services could positively affect patient
                outcomes.
                ---------------------------------------------------------------------------
                    \81\ Bindman, AB, Cox DF. Changes in health care costs and
                mortality associated with transitional care management services
                after a discharge among Medicare beneficiaries [published online
                July 30, 2018]. JAMA Intern Med, doi:10.1001/
                jamainternmed.2018.2572.
                ---------------------------------------------------------------------------
                    In developing the proposal designed to increase utilization of TCM
                services, we considered factors that could contribute to low
                utilization. Bindman and Cox identified two likely contributing
                factors: The administrative burdens associated with billing TCM
                services and the payment amount to physicians for furnishing these
                services.
                    We focused initially on the requirements for billing TCM services.
                In reviewing TCM billing requirements, we noted that we had established
                in the CY 2013 PFS final rule with comment period a list of 57 HCPCS
                codes that could not be billed during the 30-day period covered by TCM
                services by the same practitioner reporting TCM (77 FR 68990). This
                list mirrored reporting restrictions put in place by the CPT Editorial
                Panel for the TCM codes. At the time we established separate payment
                for the TCM CPT codes, we agreed with the CPT Editorial Panel that the
                services described by the 57 codes could be overlapping and duplicative
                with TCM in their definition and scope. Additionally, many of the codes
                were not separately payable or covered under the PFS so even if they
                had been reported for PFS payment, they would not have been paid
                separately (see, for example, 77 FR 68985).
                [[Page 62686]]
                    In response to those initial concerns, we adopted billing
                restrictions to avoid duplicative billing and payment for covered
                services. In our recent analysis of the services associated with the 57
                codes, we found that the majority of codes on the list are either
                bundled, noncovered by Medicare, or invalid for Medicare payment
                purposes. Table 20 provides detailed information regarding the subset
                of these codes that would be separately payable under the PFS (Status
                Indicator ``A'') and, as such, are the focus of CY 2020 policy for TCM.
                Fourteen (14) codes on the list represent active codes that are paid
                separately under the PFS and that upon reconsideration, we believe do
                not substantially overlap with TCM services and should be separately
                payable alongside medically necessary TCM. For example, CPT code 99358
                (Prolonged E/M service before and/or after direct patient care; first
                hour; non-face-to-face time spent by a physician or other qualified
                health care professional on a given date providing prolonged service)
                would allow the physician or other qualified healthcare professional
                extra time to review records and manage patient support services after
                the face-to-face visit required as part of TCM services.
                    After review of the services described by the 14 HCPCS codes, we
                determined that the 14 codes, when medically necessary, may complement
                TCM services rather than substantially overlap or duplicate services.
                We also believed removing the billing restrictions associated with the
                14 codes might increase use of TCM services.
                [GRAPHIC] [TIFF OMITTED] TR15NO19.027
                    Thus, with the goal of increasing medically appropriate use of TCM
                services, we proposed to revise our billing requirements for TCM by
                allowing TCM codes to be billed concurrently with any of these 14
                codes. In the proposed rule, we solicited comment on four questions
                related to current billing policies. They included:
                     Does overlap of services exist, and if so, which services
                should be
                [[Page 62687]]
                restricted from being billed concurrently with TCM?
                     Does overlap depend upon whether the same or a different
                practitioner reports the services; we note that CPT reporting rules
                generally apply at the practitioner level?
                     Should our policy differ based upon whether the same or
                different practitioner reports the services?
                     Does the newest CPT code in the chronic care management
                services family (CPT code 99491 for CCM by a physician or other
                qualified health professional, established in 2019) overlap with TCM or
                should it be reportable and separately payable in the same service
                period?
                    The second part of our analysis examined how current payment rates
                for TCM might negatively affect the appropriate utilization of TCM
                services, an idea proposed by Bindman and Cox. Although we sought
                comment previously about factors affecting utilization of CCM and TCM
                services, we received too few comments related specifically to TCM to
                know if payment affected use of the service.
                    As part of a regular RUC review of new technologies or services
                during 2018, CPT code 99495 (Transitional Care Management services with
                the following required elements: Communication (direct contact,
                telephone, electronic) with the patient and/or caregiver within two
                business days of discharge; medical decision making of at least
                moderate complexity during the service period; face-to-face visit
                within 14 calendar days of discharge) and CPT code 99496 (Transitional
                Care Management services with the following required elements:
                Communication (direct contact, telephone, electronic) with the patient
                and/or caregiver within two business days of discharge; medical
                decision making of at least high complexity during the service period;
                face-to-face visit within 7 calendar days of discharge) were
                resurveyed. For this RUC resurvey, several years of claims data were
                available and clinicians had more experience to inform their views
                about the work required to furnish TCM services. Based upon the results
                of the 2018 RUC survey of the TCM codes, the RUC recommended a slight
                increase in work RVUs for both codes. We believe the results from the
                new survey better reflect the work involved in furnishing TCM services
                as care management services. Thus, also for CY 2020, we proposed the
                RUC-recommended work RVU of 2.36 for CPT code 99495 and the RUC-
                recommended work RVU of 3.10 for CPT code 99496. We did not propose any
                PE refinements to the TCM codes.
                    We received public comments to our proposed policies and questions.
                The following is a summary of the comments we received.
                    Comment: With regard to the questions about billing requirements,
                most commenters wrote in support of our proposal to remove billing
                restrictions associated with the 14 codes that, at present, cannot be
                billed concurrently with TCM. A few commenters indicated that overlap,
                if it does exist, is minimal. Some commenters cautioned that our
                suggested change to billing might cause increased confusion for payers
                other than Medicare and suggested that CMS instead work with the CPT
                Editorial Panel to review and possibly revise the restrictions. In
                response to our questions about overlap in services, commenters
                reported that overlap is not dependent upon whether the same or a
                different practitioner reports the services. Commenters added that
                policy should not be based upon what practitioner reports the services.
                Finally, commenters expressed support for allowing CPT code 99491
                (Chronic care management services, provided personally by a physician
                or other qualified healthcare professional, at least 30 minutes of
                professional time per calendar month) to be reportable and separately
                payable in the same service period as TCM.
                    Response: We thank the many commenters for their comments regarding
                ways to increase utilization of TCM services. Our goal in proposing to
                remove the current billing restrictions was to increase appropriate
                utilization of TCM services, particularly in light of the potential
                benefits noted by Bindman and Cox. Since publication of the CY 2020 PFS
                proposed rule, we have identified two chronic care management codes,
                CPT codes 99490 and 99491 that are not listed in the TCM section of the
                CPT manual as being restricted from concurrent billing. However, in the
                care management section of the 2019 CPT Manual, prefatory language
                indicates that neither CPT code 99495 nor 99496 (see, page 50) can be
                billed during the same month as CPT code 99490. Given our proposal to
                remove current billing restrictions, we believe that both CPT codes
                99490 and the new 99491 should be added to the list of care management
                codes that can be billed concurrently with TCM when relevant and
                medically necessary.
                    We continue to believe that revising the billing requirements and
                allowing TCM codes to be billed concurrently with codes currently
                restricted will help to achieve our goal and may result in other payers
                implementing similar changes. Additionally, this change may lead the
                CPT Editorial Panel to consider revising the current prohibitions on
                billing TCM with certain codes.
                    Comment: Commenters uniformly recommended that CMS finalize the
                increased valuations for the two TCM codes. Commenters expressed
                support for the agency's goal of increasing utilization of medically
                necessary TCM services given the potential benefits the services
                provide to patients as noted by Bindman and Cox.
                    Response: We believe that adopting the RUC-recommended increase in
                valuation of the work RVUs will support our goal of increasing
                medically necessary TCM services.
                    After considering public comments on our questions and proposals,
                and in light of our goal of increasing utilization of TCM services, we
                are finalizing our proposal to allow concurrent billing of the care
                management codes currently restricted from being billed with TCM. This
                includes allowing concurrent billing of TCM with the 14 codes specified
                in Table 20, as well as CPT codes 99490 and 99491, which we have
                identified as codes that also fit this policy. We are finalizing for
                both TCM codes the proposed increases in work RVUs and the RUC-
                recommended direct PE inputs. We look forward to working with the
                public and other stakeholders to potentially further refine our billing
                policies through future notice and comment rulemaking.
                3. Chronic Care Management (CCM) Services
                    CCM services are comprehensive care coordination services per
                calendar month, furnished by a physician or nonphysician practitioner
                (NPP) managing overall care and their clinical staff, for patients with
                two or more serious chronic conditions. There are currently two general
                subsets of codes: One for non-complex chronic care management (starting
                in 2015, with a new code for 2019) and a set of codes for complex
                chronic care management (starting in 2017). Tables 21 and 22 list the
                applicable current codes (abbreviated) and provide a high-level summary
                of the CCM service elements. We refer readers to the following website
                for more comprehensive information regarding the CCM codes and the
                existing requirements for billing them to the PFS, available on our
                website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management.html.
                [[Page 62688]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.028
                [GRAPHIC] [TIFF OMITTED] TR15NO19.029
                    Early data show that, in general, CCM services are increasing
                patient and practitioner satisfaction, saving costs and enabling solo
                practitioners to remain in independent practice.\82\ Utilization has
                reached approximately 75 percent of the level we initially assumed
                under the PFS when we began paying for CCM services separately under
                the PFS. While these are positive results, we believe that CCM services
                (especially complex CCM services) continue to be underutilized. In
                addition, we note that, at the February 2019 CPT Editorial Panel
                meeting, certain specialty associations requested refinements to the
                existing CCM codes, and consideration of their proposal was postponed.
                Also, we have heard from some stakeholders suggesting that the time
                increments for non-complex CCM performed by clinical staff should be
                changed to recognize finer increments of time, and that certain
                requirements related to care planning are unclear. Based on our
                consideration of this ongoing feedback, we believe some of the
                refinements requested by specialty associations and other stakeholders
                may be necessary to improve payment accuracy, reduce unnecessary burden
                [[Page 62689]]
                and help ensure that beneficiaries who need CCM services have access to
                them. Accordingly, we proposed the following changes to the CCM code
                set for CY 2020.
                ---------------------------------------------------------------------------
                    \82\ https://innovation.cms.gov/Files/reports/chronic-care-mngmt-finalevalrpt.pdf.
                ---------------------------------------------------------------------------
                a. Non-Complex CCM Services by Clinical Staff (CPT Code 99490, HCPCS
                Codes GCCC1 and GCCC2)
                    Currently, the clinical staff CPT code for non-complex CCM, CPT
                code 99490 (Chronic care management services, 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: 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.) describes 20 or more
                minutes of clinical staff time spent performing chronic care management
                activities under the direction of a physician/qualified health care
                professional (QHP). When we initially adopted this code for payment
                and, in feedback we have since received, a number of stakeholders
                suggested that CMS undervalued the PE RVU because we assumed that the
                minimum time for the code (20 minutes of clinical staff time) would be
                typical (see, for example, 79 FR 67717 through 67718). In the CY 2017
                PFS final rule with comment period, we continued to consider whether
                the payment amount for CPT code 99490 is appropriate, given the amount
                of time typically spent furnishing CCM services (81 FR 80243 through
                80244). We adopted the complex CCM codes for payment beginning in CY
                2017, in part, to pay more appropriately for services furnished to
                beneficiaries requiring longer service times (see below). Some
                stakeholders continue to recommend that we should create an add-on code
                for non-complex CCM performed by clinical staff, such that these
                services would be defined and valued in 20-minute increments of time
                with additional payment for each additional 20 minutes of clinical
                staff time spent performing care management activities.
                    We agreed that coding changes that identify additional time
                increments may improve payment accuracy for non-complex CCM.
                Accordingly, we proposed to adopt two new G codes with new increments
                of clinical staff time instead of the existing single CPT code (CPT
                code 99490). The first G code would have described the initial 20
                minutes of clinical staff time, and the second G code would have
                described each additional 20 minutes thereafter. We intended these
                would be temporary G codes, to be used for PFS payment instead of CPT
                code 99490 until the CPT Editorial Panel can consider revisions to the
                current CPT code set. We said we would consider adopting any CPT
                code(s) once the CPT Editorial Panel completes its work. We
                acknowledged that imposing a transitional period during which G codes
                would be used under the PFS in lieu of the CPT codes is potentially
                disruptive, and solicited comment on whether the benefit of proceeding
                with the proposed G codes outweighs the burden of transitioning to
                their use in the intervening year(s) before a decision by the CPT
                Editorial Panel.
                    We proposed that the base code would be HCPCS code GCCC1 (Chronic
                care management services, initial 20 minutes of clinical staff time
                directed by a physician or other qualified health care 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; and comprehensive care plan established,
                implemented, revised, or monitored. (Chronic care management services
                of less than 20 minutes duration, in a calendar month, are not reported
                separately)). We proposed a work RVU of 0.61 for HCPCS code GCCC1,
                which we crosswalked from CPT code 99490. We believed these codes would
                have a similar amount of work since they would have the same intra-
                service time of 15 minutes.
                    We proposed an add-on HCPCS code GCCC2 (Chronic care management
                services, each additional 20 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). (Use
                GCCC2 in conjunction with GCCC1). (Do not report GCCC1, GCCC2 in the
                same calendar month as GCCC3, GCCC4, 99491)). We proposed a work RVU of
                0.54 for HCPCS code GCCC2 based on a crosswalk to CPT code 11107
                (Incisional biopsy of skin (e.g., wedge) (including simple closure,
                when performed); each separate/additional lesion (List separately in
                addition to code for primary procedure)), which has a work RVU of 0.54,
                which we believed would accurately reflect the work associated with
                each additional 20 minutes of CCM services. Both codes would have the
                same intraservice time of 15 minutes. We noted that the nature of the
                PFS relative value system is such that all services are appropriately
                subject to comparisons to one another. Although codes that describe
                clinically similar services are sometimes stronger comparator codes,
                codes need not share the same site of service, patient population, or
                utilization level to serve as an appropriate crosswalk. In this case,
                we believed CPT code 11107 shared a similar work intensity to proposed
                HCPCS code GCCC2. Furthermore, although HCPCS codes GCCC1 and GCCC2
                would share the same intraservice time, add-on codes may have lower
                intensity than the base codes because they describe the continuation of
                an already initiated service.
                    We solicited public comment on whether we should limit the number
                of times HCPCS code GCCC2 could be reported in a given service period
                for a given beneficiary. It was not clear how often more than 40
                minutes of clinical staff time is currently spent or is medically
                necessary. In addition, once 60 minutes of clinical staff time is
                spent, many or most patients might also require complex medical
                decision-making, and such patients would already be described under
                existing coding for complex CCM. We believed a limit (such as allowing
                the add-on code to be reported only once per service period per
                beneficiary) may be appropriate in order to maintain distinctions
                between complex and non-complex CCM, as well as appropriately limit
                beneficiary cost sharing and program spending to medically necessary
                services. We noted that complex CCM already describes (in part) 60 or
                more minutes of clinical staff time in a service period. We solicited
                comment on whether and how often beneficiaries who do not require
                complex CCM (for example, do not require the complex medical decision
                making that is part of complex CCM) would need 60 or more minutes of
                non-complex CCM clinical staff time and thereby warrant more than one
                use of HCPCS code GCCC2 within a service period.
                    Comment: Several commenters supported the proposed add-on HCPCS
                code GCCC2, and recommended that there be a limit on its use
                (frequency) to keep non-complex CCM distinct from complex CCM. These
                commenters stated that patients requiring multiple uses of the add-on
                service likely require the moderate to high medical decision making of
                complex CCM. Other commenters stated that, while they have patients who
                do not require the complex
                [[Page 62690]]
                medical decision making that is part of complex CCM, care management
                for these patients is time-consuming and would require 60 or more
                minutes of non-complex CCM clinical staff time within a service period.
                These commenters suggested that limiting the frequency of reporting
                HCPCS code GCCC2 to twice during a service period allows for accurate
                payments, while preventing inappropriate use of the code. The Medicare
                Payment Advisory Commission (MedPAC) expressed support for the proposed
                add-on code for non-complex CCM because it would better reflect the
                resources involved in furnishing care management services and increase
                payment accuracy for CCM. Other commenters stated that G codes would
                help to facilitate earlier implementation and would ease transition to
                any updates made to CPT codes.
                    However, a number of commenters were not supportive of the
                introduction of temporary G codes within the CCM code set, believing it
                would produce administrative burden and cause confusion. These
                commenters stated that in September 2019 the CPT Editorial Panel was
                considering an application for similar changes to refine the code set.
                These commenters urged us to work with the CPT Editorial Panel
                regarding changes to the CCM code set and its revaluation. A few
                commenters suggested that CMS could achieve its burden reduction goals
                by continuing to recognize CPT codes 99490, 99487, and 99489 and also
                provide CMS-specific guidance for those codes for purposes of billing
                Medicare.
                    Response: We are not finalizing our proposal to create HCPCS codes
                GCCC1 (or GCCC3 or GCCC4, see below) in consideration of commenters'
                concerns that the introduction of temporary G codes replacing most of
                the CCM code set would create administrative burden, especially in
                light of the CPT Editorial Panel's currently ongoing work in this area.
                However we are finalizing GCCC2 (the add-on for non-complex CCM
                clinical staff time), henceforth referred to as G2058, because this
                code addresses what we believe is an important gap in the current code
                set that should be addressed more immediately, and that finalizing only
                this single G code rather than the full range of proposed G codes will
                allow payment for these services while creating significantly less
                administrative burden. Practitioners who choose to use G2058 can report
                the initial 20 minutes of non-complex CCM under CPT code 99490 and
                receive increased payment for their work under G2058. We are
                sympathetic to commenters' concerns that the introduction of temporary
                replacement G codes across the CCM code set may introduce substantial
                confusion or administrative burden, but we believe a single new G code
                to pay more for additional 20-minute increments of non-complex CCM
                clinical staff time is important to pursue now. We are finalizing the
                work RVU for G2058 as proposed.
                    We agree with commenters that there should be a frequency limit on
                the reporting of HCPCS code G2058 to maintain the distinction between
                complex and non-complex CCM and, in response to comments, we are
                finalizing that HCPCS code G2058 will be reportable a maximum of two
                times within a given service period for a given beneficiary. We believe
                the availability of this G code will further our policy goals to
                improve payment accuracy for care management services and allow
                practitioners and their teams to spend more time with their patients.
                    Comment: A few commenters suggested that CMS should revalue the
                work RVUs for the CCM codes given that we proposed to increase the work
                RVUs for TCM, and CCM was originally valued based upon the RVUs for
                TCM.
                    Response: We appreciate these suggestions but, given the ongoing
                work of the CPT Editorial Panel regarding these codes, we will consider
                potential revaluation of this code set in the context of any future
                changes or recommendations that may be made by the CPT Editorial Panel
                or the RUC.
                b. Complex CCM Services (CPT Codes 99487 and 99489, and HCPCS Codes
                GCCC3 and GCCC4)
                    There are two CPT codes for complex CCM:
                     CPT code 99487 (Complex chronic care management services,
                with the following required elements: Multiple (two or more) chronic
                conditions expected to last at least 12 months, or until the death of
                the patient; chronic conditions place the patient at significant risk
                of death, acute exacerbation/decompensation, or functional decline;
                establishment or substantial revision of a comprehensive care plan;
                moderate or high complexity medical decision making; 60 minutes of
                clinical staff time directed by physician or other qualified health
                care professional, per calendar month. (Complex chronic care management
                services of less than 60 minutes duration, in a calendar month, are not
                reported separately); and
                     CPT code 99489 (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).
                    Complex CCM describes care management for patients who require not
                only more clinical staff time, but also complex medical decision-making
                and establishment or substantial revision of the care plan.
                Specifically, the CPT codes for complex CCM include in the code
                descriptors a requirement for establishment or substantial revision of
                the comprehensive care plan. The code descriptors for complex CCM also
                include moderate to high complexity medical decision-making (moderate
                to high complexity medical decision-making is an explicit part of the
                services).
                    We proposed to adopt two new G codes that would be used for billing
                under the PFS instead of CPT codes 99487 and 99489, and that would not
                include the service component of substantial care plan revision. We
                believed it is not necessary to explicitly include substantial care
                plan revision because patients requiring moderate to high complexity
                medical decision making implicitly need and receive substantial care
                plan revision. The service component of substantial care plan revision
                is potentially duplicative with the medical decision making service
                component and, therefore, we believed it is unnecessary as a means of
                distinguishing eligible patients. Instead of CPT code 99487, we
                proposed to adopt HCPCS code GCCC3 (Complex chronic care management
                services, with the following required elements: Multiple (two or more)
                chronic conditions expected to last at least 12 months, or until the
                death of the patient; chronic conditions 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; 60 minutes of clinical staff time directed by physician or
                other qualified health care professional, per calendar month. (Complex
                chronic care management services of less than 60 minutes duration, in a
                calendar month, are not reported separately)). We proposed a work RVU
                of 1.00 for HCPCS code GCCC3, which is a crosswalk to CPT code 99487.
                    Instead of CPT code 99489, we proposed to adopt HCPCS code GCCC4
                (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).
                (Report GCCC4 in conjunction with GCCC3). (Do not report GCCC4 for care
                [[Page 62691]]
                management services of less than 30 minutes additional to the first 60
                minutes of complex chronic care management services during a calendar
                month)). We proposed a work RVU of 0.50 for HCPCS code GCCC4, which is
                a crosswalk to CPT code 99489.
                    We intended these would be temporary G codes to remain in place
                until the CPT Editorial Panel can consider revising the current code
                descriptors for complex CCM services. We stated that we would consider
                adopting any new or revised complex CCM CPT code(s) once the CPT
                Editorial Panel completes its work. We acknowledged that imposing a
                transitional period during which G codes would be used under the PFS in
                lieu of the CPT codes is potentially disruptive. We solicited comment
                on whether the benefit of proceeding with the proposed G codes
                outweighs the burden of transitioning to their use in the intervening
                year(s) before a decision by the CPT Editorial Panel.
                    Comment: While expressing general support for the proposed changes
                to these codes to remove the element of substantial care plan revision,
                several commenters expressed concerns that the temporary introduction
                of G codes would produce administrative burden and cause confusion.
                These commenters stated that in September 2019 the CPT Editorial Panel
                was considering an application for similar changes to refine the code
                set and clarify care planning. These commenters urged us to work with
                the CPT Editorial Panel regarding changes to the CCM code set and its
                revaluation. However, other commenters stated that G codes would help
                to facilitate earlier implementation and would ease transition to any
                updates made to CPT codes. A few commenters suggested that CMS could
                achieve its burden reduction goals by continuing to recognize CPT codes
                99490, 99487, and 99489 and also provide CMS-specific guidance for
                those codes for purposes of billing Medicare.
                    Response: We are not finalizing our proposal to create HCPCS codes
                GCCC3 and GCCC4 in light of concerns raised by commenters, especially
                in light of the CPT Editorial Panel's currently ongoing work in this
                area and the concerns expressed by those that we expect would likely
                provide these services. Instead, given the support for our proposed
                care planning changes, for CY 2020 we will continue to recognize CPT
                codes 99487 and 99489, but with a different care planning element for
                purposes of billing Medicare. Beginning in CY 2020, for PFS billing
                purposes for CPT codes 99487 and 99489, we will interpret the code
                descriptor ``establishment or substantial revision of a comprehensive
                care plan'' to mean that a comprehensive care plan is established,
                implemented, revised, or monitored. This will allow for consistency in
                the care planning service element of complex CCM and non-complex CCM
                services provided by clinical staff. While we usually create G codes
                with alternative code descriptors when our payment policy varies from
                what is included in a CPT code descriptor(s), the change we proposed
                for the complex CCM care plan code descriptor is a relatively minor
                modification to the CPT code descriptor that we believe can be
                accomplished without the use of G codes. We look forward to reviewing
                any refinements or other recommendations for these services that may
                come from the CPT Editorial Panel and the RUC, and will consider such
                recommendations through our rulemaking process.
                c. Typical Care Plan
                    In 2013, in working with the physician community to develop and
                propose the CCM codes for PFS payment, the medical community
                recommended and CMS agreed that adequate care planning is integral to
                managing patients with multiple chronic conditions. We stated our
                belief that furnishing care management to beneficiaries with multiple
                chronic conditions requires complex and multidisciplinary care
                modalities that involve, among other things, regular physician
                development and/or revision of care plans and integration of new
                information into the care plan (78 FR 43337). In the CY 2014 PFS final
                rule with comment period (78 FR 74416 through 74418), consistent with
                recommendations CMS received in 2013 from the AMA's Complex Chronic
                Care Coordination Workgroup, we finalized a CCM scope of service
                element for a patient-centered plan of care with the following
                characteristics: It is a comprehensive plan of care for all health
                problems and typically includes, but is not limited to, the following
                elements: Problem list; expected outcome and prognosis; measurable
                treatment goals; cognitive and functional assessment; symptom
                management; planned interventions; medical management; environmental
                evaluation; caregiver assessment; community/social services ordered;
                how the services of agencies and specialists unconnected to the
                practice will be directed/coordinated; identify the individuals
                responsible for each intervention, requirements for periodic review;
                and when applicable, revisions of the care plan.
                    The CPT Editorial Panel also incorporated and adopted this language
                in the prefatory language for Care Management Services codes (page 49
                of the 2019 CPT Codebook) including CCM services.
                    As we continue to consider the need for potential refinements to
                the CCM code set, we have heard that there is still some confusion in
                the medical community regarding what a care plan typically includes. We
                re-reviewed this language for CCM, and we believe there may be aspects
                of the typical care plan language we adopted for CCM that are redundant
                or potentially unduly burdensome. In our CY 2020 PFS proposed rule, we
                noted that because these are ``typical'' care plan elements, these
                elements do not comprise a set of strict requirements that must be
                included in a care plan for purposes of billing for CCM services; the
                elements are intended to reflect those that are typically, but perhaps
                not always, included in a care plan as medically appropriate for a
                particular beneficiary. Nevertheless, we proposed to eliminate the
                phrase ``community/social services ordered, how the services of
                agencies and specialists unconnected to the practice will be directed/
                coordinated, identify the individuals responsible for each
                intervention'' and insert the phrase ``interaction and coordination
                with outside resources and practitioners and providers.'' We believed
                simpler language could describe the important work of interacting and
                coordinating with resources external to the practice. While it is
                preferable, when feasible, to identify who is responsible for
                interventions, it may be difficult to maintain an up-to-date listing of
                responsible individuals especially when they are outside of the
                practice, for example, when there is staff turnover or assignment
                changes.
                    We proposed new language to read: The comprehensive care plan for
                all health issues typically includes, but is not limited to, the
                following elements:
                     Problem list.
                     Expected outcome and prognosis.
                     Measurable treatment goals.
                     Cognitive and functional assessment.
                     Symptom management
                     Planned interventions.
                     Medical management.
                     Environmental evaluation
                     Caregiver assessment
                     Interaction and coordination with outside resources and
                practitioners and providers.
                     Requirements for periodic review.
                     When applicable, revision of the care plan.
                [[Page 62692]]
                    We welcomed feedback on our proposal, including language that would
                best guide practitioners as they decide what to include in their
                comprehensive care plan for CCM recipients.
                    Comment: Commenters largely supported CMS' proposed definition of
                the typical care plan, and stated that it was simpler than the current
                definition and also comprehensive.
                    Response: We thank the commenters for their support and are
                finalizing our proposed changes to the typical care plan for all CCM.
                We are eliminating the phrase ``community/social services ordered, how
                the services of agencies and specialists unconnected to the practice
                will be directed/coordinated, identify the individuals responsible for
                each intervention'' and inserting the phrase ``interaction and
                coordination with outside resources and practitioners and providers.''
                The new language will read: ``The comprehensive care plan for all
                health issues typically includes, but is not limited to, the following
                elements:
                     Problem list.
                     Expected outcome and prognosis.
                     Measurable treatment goals.
                     Cognitive and functional assessment.
                     Symptom management
                     Planned interventions.
                     Medical management.
                     Environmental evaluation
                     Caregiver assessment
                     Interaction and coordination with outside resources and
                practitioners and providers.
                     Requirements for periodic review.
                     When applicable, revision of the care plan.''
                    We anticipate that this change will reduce burden and simplify the
                important work of interacting and coordinating with resources external
                to the practice.
                4. Principal Care Management (PCM) Services
                    A gap we identified in coding and payment for care management
                services is care management for patients with only one chronic
                condition. The current CCM codes require patients to have two or more
                chronic conditions. These codes are primarily billed by practitioners
                who are managing a patient's total care over a month, including primary
                care practitioners and some specialists such as cardiologists or
                nephrologists. We have heard from a number of stakeholders, especially
                those in specialties that use the office/outpatient E/M code set to
                report the majority of their services, that there can be significant
                resources involved in care management for a single high risk disease or
                complex chronic condition that is not well accounted for in existing
                coding (FR 78 74415). This issue has also been raised by the
                stakeholder community in proposal submissions to the Physician-Focused
                Payment Model Technical Advisory Committee (PTAC), which are available
                at https://aspe.hhs.gov/ptac-physician-focused-payment-model-technical-advisory-committee. Therefore, we proposed separate coding and payment
                for Principal Care Management (PCM) services, which describe care
                management services for one serious chronic condition. A qualifying
                condition will typically be expected to last between 3 months and 1
                year, or until the death of the patient, may have led to a recent
                hospitalization, and/or place the patient at significant risk of death,
                acute exacerbation/decompensation, or functional decline.
                    Although we did not propose any restrictions on the specialties
                that could bill for PCM, we expect that most of these services will be
                billed by specialists who are focused on managing patients with a
                single complex chronic condition requiring substantial care management.
                We expect that, in most instances, initiation of PCM will be triggered
                by an exacerbation of the patient's complex chronic condition or recent
                hospitalization such that disease-specific care management is
                warranted. We anticipate that in the majority of instances, PCM
                services will be billed when a single condition is of such complexity
                that it cannot be managed as effectively in the primary care setting,
                and instead requires management by another, more specialized,
                practitioner. For example, a typical patient may present to their
                primary care practitioner with an exacerbation of an existing chronic
                condition. Although the primary care practitioner may be able to
                provide care management services for this one complex chronic
                condition, it is also possible that the primary care practitioner and/
                or the patient could instead decide that another clinician should
                provide relevant care management services. In this case, the primary
                care practitioner will still oversee the overall care for the patient
                while the practitioner billing for PCM services will provide care
                management services for the specific complex chronic condition. The
                treating clinician may need to provide a disease-specific care plan or
                may need to make frequent adjustments to the patient's medication
                regimen. The expected outcome of PCM is for the patient's condition to
                be stabilized by the treating clinician so that overall care management
                for the patient's condition can be returned to the patient's primary
                care practitioner. If the beneficiary only has one complex chronic
                condition that is overseen by the primary care practitioner, then the
                primary care practitioner will also be able to bill for PCM services.
                We proposed that PCM services include coordination of medical and/or
                psychosocial care related to the single complex chronic condition,
                provided by a physician or clinical staff under the direction of a
                physician or other qualified health care professional.
                    We anticipate that many patients will have more than one complex
                chronic condition. If a clinician is providing PCM services for one
                complex chronic condition, management of the patient's other conditions
                will continue to be managed by the primary care practitioner while the
                patient is receiving PCM services for a single complex condition. It is
                also possible that the patient could receive PCM services from more
                than one clinician if the patient experiences an exacerbation of more
                than one complex chronic condition simultaneously.
                    For CY 2020, we proposed to make separate payment for PCM services
                via two new G codes: HCPCS code G2064 (Comprehensive care management
                services for a single high-risk disease, e.g., Principal Care
                Management, at least 30 minutes of physician or other qualified health
                care professional time per calendar month with the following elements:
                One complex chronic condition lasting at least 3 months, which is the
                focus of the care plan, the condition is of sufficient severity to
                place patient at risk of hospitalization or have been the cause of a
                recent hospitalization, the condition requires development or revision
                of disease-specific care plan, the condition requires frequent
                adjustments in the medication regimen, and/or the management of the
                condition is unusually complex due to comorbidities) and HCPCS code
                G2065 (Comprehensive care management for a single high-risk disease
                services, e.g., Principal Care Management, at least 30 minutes of
                clinical staff time directed by a physician or other qualified health
                care professional, per calendar month with the following elements: One
                complex chronic condition lasting at least 3 months, which is the focus
                of the care plan, the condition is of sufficient severity to place
                patient at risk of hospitalization or have been cause of a recent
                hospitalization, the condition requires development or revision of
                disease-specific care plan, the condition requires frequent adjustments
                in the
                [[Page 62693]]
                medication regimen, and/or the management of the condition is unusually
                complex due to comorbidities). HCPCS code G2064 would be reported when,
                during the calendar month, at least 30 minutes of physician or other
                qualified health care provider time is spent on comprehensive care
                management for a single high risk disease or complex chronic condition.
                HCPCS code G2065 would be reported when, during the calendar month, at
                least 30 minutes of clinical staff time is spent on comprehensive
                management for a single high risk disease or complex chronic condition.
                    For HCPCS code G2064, we proposed a crosswalk to the work value
                associated with CPT code 99217 (Observation care discharge day
                management (This code is to be utilized to report all services provided
                to a patient on discharge from outpatient hospital ``observation
                status'' if the discharge is on other than the initial date of
                ``observation status.'' To report services to a patient designated as
                ``observation status'' or ``inpatient status'' and discharged on the
                same date, use the codes for Observation or Inpatient Care Services
                [including Admission and Discharge Services, 99234-99236 as
                appropriate])) as we believe these values most accurately reflect the
                resource costs associated when the billing practitioner performs PCM
                services. CPT code 99217 has the same intraservice time as HCPCS code
                G2064 and the physician work is of similar intensity. Therefore, we
                proposed a work RVU of 1.28 for HCPCS code G2064.
                    For HCPCS code G2065, we proposed a crosswalk to the work and PE
                inputs associated with CPT code 99490 (clinical staff non-complex CCM)
                as we believe these values reflect the resource costs associated with
                the clinician's direction of clinical staff who are performing the PCM
                services, and the intraservice times and intensity of the work for the
                two codes will be the same. Therefore, we proposed a work RVU of 0.61
                for HCPCS code G2065.
                    Although we proposed separate coding and payment for PCM services
                performed by clinical staff with the oversight of the billing
                professional and services furnished directly by the billing
                professional, we solicited comment on whether both codes are necessary
                to appropriately describe and bill for PCM services. We note that we
                are basing this coding structure on the codes for CCM services with CPT
                code 99491 reflecting care management by the billing professional and
                CPT code 99490 reflecting care management by clinical staff directed by
                a physician or other qualified health care professional.
                    We acknowledged that we concurrently proposed revisions for both
                complex and non-complex CCM services. Were we not to finalize the
                changes for both complex and non-complex CCM services, we stated our
                belief that the overall structure and description of the CCM services
                remain close enough to serve as a model for the coding structure and
                description of services for the proposed PCM services. We solicited
                public comment on whether it would be appropriate to create an add-on
                code for additional time spent each month (similar to HCPCS code GCCC2
                discussed above) when PCM services are furnished by clinical staff
                under the direction of the billing practitioner.
                    Comment: Most commenters supported separate payment for PCM
                services, noting the gap in payment for care management and
                coordination for a patient's single complex or chronic condition. Other
                commenters were supportive of the policy goal but expressed concerns
                that the work described by PCM is duplicative of work being furnished
                as part of CCM and encouraged CMS to work with the CPT editorial panel
                to develop coding for this service.
                    Response: We appreciate the support for both the policy goal of
                appropriate payment for care management services conducted for a
                patient's single complex or chronic condition and for separate payment
                for PCM services. We look forward to reviewing and considering
                recommendations from the CPT Editorial Panel and the RUC, should they
                develop and value CPT codes describing this or similar services,
                through our rulemaking process.
                    Comment: A few commenters stated that HCPCS code G2064 was
                undervalued and should have a work RVU of 1.45, which is the same work
                RVU as CPT code 99491 (Chronic care management 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). CPT code 99491
                describes the work associated with care management performed by the
                billing practitioner, in contrast to CPT code 99490, which describes
                the work associated with supervision of care management performed by
                clinical staff. Commenters pointed out that CPT codes 99491 and 99490
                served as the model for HCPCS codes G2064 and G2065. Commenters stated
                that CPT code 99491 was a more accurate crosswalk for HCPCS code G2064
                because both codes describe the work associated with care management
                and coordination performed by the billing practitioner, and G2065
                describes the work associated with supervising care management done by
                clinical staff and was valued the same as CPT code 99490. Commenters
                also pointed out that, although PCM services describe care management
                associated with a single condition, the fact that this condition has
                most likely experienced an exacerbation or has caused the patient to
                recently be hospitalized, results in greater intensity than the work
                associated with managing multiple chronic conditions, some of which may
                be more stable.
                    Response: After considering these comments, we agree that the work
                RVU we proposed for code G2064 (1.28 RVUs) should be valued through a
                crosswalk to CPT code 99491, and we agree with the points made by
                commenters regarding the intensity of care management for a single
                condition, especially when that condition has likely experienced an
                exacerbation. We also agree that the relativity between CPT codes 99490
                and 99491 should be preserved in HCPCS codes G2064 and G2065.
                Therefore, we are finalizing an RVU of 1.45 for HCPCS code G2064.
                    Comment: A few commenters supported creation of an add-on code for
                additional time spent engaged in PCM services beyond the initial 30
                minutes, similar to HCPCS code G2060 discussed above.
                    Response: We thank commenters for their input. Given that this is a
                new service, we believe it would be more appropriate to monitor uptake
                and stakeholder response, and we will consider whether to establish a
                separate add-on code for additional time spent furnishing PCM services
                beyond the initial 30 minutes for possible future rulemaking.
                    Although we believe that PCM services describe a situation where a
                patient's condition is severe enough to require care management for a
                single complex chronic condition beyond what is described by CCM or
                performed in the primary care setting, we are concerned that a possible
                unintended consequence of making separate payment for care management
                for a single chronic condition is that a patient with multiple
                [[Page 62694]]
                chronic conditions could have their care managed by multiple
                practitioners, each only billing for PCM, which could potentially
                result in fragmented patient care, overlaps in services, and
                duplicative services. Although we did not propose additional
                requirements for the PCM services, we did consider alternatives such as
                requiring that the practitioner billing PCM must document ongoing
                communication with the patient's primary care practitioner to
                demonstrate that there is continuity of care between the specialist and
                primary care settings, or requiring that the patient have had a face-
                to-face visit with the practitioner billing PCM within the prior 30
                days to demonstrate that they have an ongoing relationship. We
                solicited comment on whether requirements such as these are necessary
                or appropriate, and whether there should be additional requirements to
                prevent potential care fragmentation or service duplication.
                    We received public comments on whether requirements such as these
                are necessary or appropriate, and whether there should be additional
                requirements to prevent potential care fragmentation or service
                duplication. The following is a summary of the comments we received and
                our responses.
                    Comment: Many commenters' shared CMS' concerns. Some commenters
                recommended that CMS not finalize separate payment for PCM services,
                stating that this would move away from patient-specific, continuous,
                comprehensive value based care management and coordination toward a
                more disease specific care management, resulting in fragmented care and
                service duplication. A few commenters with concerns about care
                fragmentation suggested that CMS first implement PCM through a
                demonstration. Others supported requiring the billing practitioner
                document ongoing communication and care coordination with any other
                practitioners overseeing care of the patient, such as primary care
                practitioners, pharmacists, hospitalists, or social workers, as
                applicable. These commenters stated that this would be sufficient to
                maintain coordination and continuity of care in the instance where
                multiple practitioners are involved in furnishing care to the
                beneficiary. A few commenters also suggested that CMS not allow billing
                of PCM services by multiple practitioners for the same indication.
                Still other commenters stated that it was not necessary to include any
                requirements pertaining to care fragmentation or service duplication,
                and that such requirements would be a barrier to uptake.
                    Response: While we share commenters' concerns regarding care
                fragmentation and service duplication, we do not believe they rise to
                the level that separate payment should not be adopted for these
                services. The type of care management services that we believe are
                appropriately described by the PCM codes involve work intensively
                focused on managing a single condition and, with very few exceptions,
                could not be replaced by a single practitioner billing CCM services for
                management of multiple chronic conditions. However, we also believe it
                necessary to put in place some requirements so as to avoid a situation
                where each of a patient's individual conditions are being managed
                separately by different practitioners who all bill for PCM services.
                Therefore, we are finalizing a requirement that ongoing communication
                and care coordination between all practitioners furnishing care to the
                beneficiary must be documented by the practitioner billing for PCM in
                the patient's medical record.
                    Due to the similarity between the description of the PCM and CCM
                services, both of which involve non-face-to-face care management
                services, we proposed that the full CCM scope of service requirements
                apply to PCM, including documenting the patient's verbal consent in the
                medical record. We solicited comment on whether there are required
                elements of CCM services that the public and stakeholders believe
                should not be applicable to PCM, and should be removed or altered.
                    A high level summary of these requirements is available in Table 23
                and available at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/ChronicCareManagement .pdf.
                Both the initiating visit and the patient's verbal consent are
                necessary as not all patients who meet the criteria to receive
                separately billable PCM services may want to receive these services.
                The beneficiary should be educated as to what PCM services are and any
                cost sharing that may apply. Additionally, as practitioners have
                informed us that beneficiary cost sharing is a significant barrier to
                provision of other care management services, we solicited comment on
                how best to educate practitioners and beneficiaries on the benefits of
                PCM services.
                [[Page 62695]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.030
                    We received public comments on whether there are required elements
                of CCM services that the public and stakeholders believe should not be
                applicable to PCM, and should be removed or altered. The following is a
                summary of the comments we received and our responses.
                    Comment: Most commenters supported application of the required
                elements of CCM to PCM with a number of refinements, although a few
                urged CMS not to add overly burdensome billing requirements. Commenters
                requested that CMS clarify that elements of CCM, such as the
                ``systematic needs assessment,'' ``receipt of preventive services,''
                and a ``comprehensive care plan'' must be furnished only for the
                specific chronic condition for which the billing practitioner is
                treating the patient. Some commenters pointed out that a
                ``comprehensive care plan'' was not needed when a practitioner is
                engaged in care management and coordination of a single complex or
                chronic condition, and instead suggested it be changed to ``disease-
                specific care plan.'' Other commenters suggest that we remove this
                language entirely. Commenters expressed concern with requiring that the
                EHR be certified to a particular standard. Commenters generally
                recommended that an initiating visit be furnished within a window of
                time to demonstrate that a relationship has been established between
                the beneficiary and the practitioner furnishing PCM. Commenters
                supported the retention of the requirement that there be the capacity
                for in-person care management. Commenters also recommended that verbal
                and or written consent be documented in the medical record so that the
                patient is aware of the service and any applicable cost sharing,
                although some stated that this was a burdensome requirement given that
                they may not know in advance which beneficiaries will require PCM
                services.
                    Response: We thank commenters for all their input. We agree with
                commenters that a ``disease-specific'' care plan is more appropriate
                than a comprehensive care plan, as the practitioner will be providing
                care coordination and management for a single condition, and as such,
                the care plan may be more limited. We also agree that certain aspects
                of CCM, such as ``systematic needs assessment'' and ``receipt of
                preventive services'' should only be furnished as applicable to the
                condition being treated and should not be a requirement to bill for PCM
                services. Table 24 shows the elements of CCM, as revised in response to
                comments, that will be required for PCM.
                [[Page 62696]]
                [GRAPHIC] [TIFF OMITTED] TR15NO19.031
                    With regard to the certified EHR, we continue to believe that use
                of certified EHR technology is vital to ensure that practitioners are
                capable of providing the full scope of PCM services, such as timely
                care coordination and continuity of care (see our prior discussion of
                this issue at 79 FR 67723). The use of certified EHR technology helps
                ensure that members of the care team have timely access to the
                patient's most updated health information. Also, we believe that use of
                certified EHR technology among physicians and other practitioners will
                increase as we move forward to implement the Quality Payment Program,
                including MIPS and Advanced Alternative Payment Models, as well as
                other value-based payment initiatives. Accordingly, we are not
                modifying the proposed use of certified EHR technology as an element of
                PCM services.
                    We received public comments on how best to educate practitioners
                and beneficiaries on the benefits of PCM services. The following is a
                summary of the comments we received and our responses.
                    Comment: Commenters recommended that CMS issue guidance for billing
                and coding criteria, clinical situations in which PCM may be billed,
                and what defines a complex condition.
                    Response: We look forward to continued engagement with the public
                to revise and refine PCM services as they are implemented. We encourage
                stakeholders to submit questions and information to CMS so that we
                might consider changes or clarification for future rulemaking.
                    Additionally, we proposed to add HCPCS code G2065 to the list of
                designated care management services for which we allow general
                supervision as described in our regulation at Sec.  410.26(b)(5).
                    Comment: Commenters supported adding HCPCS code G2065 to the list
                of designated care management services for which we allow general
                supervision.
                    Response: We thank commenters for their support and are finalizing
                as proposed.
                    Due to the potential for duplicative payment, we proposed that PCM
                could not be billed by the same practitioner for the same patient
                concurrent with certain other care management services, such as CCM,
                behavioral health integration services, and monthly capitated ESRD
                payments. We also proposed that PCM will not be billable by the same
                practitioner for the same patient during a surgical global period, as
                we believe those resource costs will already be included in the
                valuation of the global surgical code.
                    We also solicited comment on any potential for duplicative payment
                between the PCM services and other services, such as interprofessional
                consultation services (CPT codes 99446-99449 (Interprofessional
                telephone/internet/electronic health record assessment and management
                service provided by a consultative physician, including a verbal and
                written report to the patient's treating/requesting physician or other
                qualified health care professional), CPT code 99451 (Interprofessional
                telephone/
                [[Page 62697]]
                internet/electronic health record assessment and management service
                provided by a consultative physician, including a written report to the
                patient's treating/requesting physician or other qualified health care
                professional, 5 minutes or more of medical consultative time), and CPT
                code 99452 (Interprofessional telephone/internet/electronic health
                record referral service(s) provided by a treating/requesting physician
                or other qualified health care professional, 30 minutes) or remote
                patient monitoring (CPT code 99091 (Collection and interpretation of
                physiologic data (e.g., ECG, blood pressure, glucose monitoring)
                digitally stored and/or transmitted by the patient and/or caregiver to
                the physician or other qualified health care professional, qualified by
                education, training, licensure/regulation (when applicable) requiring a
                minimum of 30 minutes of time, each 30 days), 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 CPT code 99457 (Remote physiologic
                monitoring treatment management services, 20 minutes or more of
                clinical staff/physician/other qualified health care professional time
                in a calendar month requiring interactive communication with the
                patient/caregiver during the month).
                    Comment: Commenters generally supported restricting the number of
                care management services billable by the same practitioner for the same
                patient, stating that this was necessary to avoid service duplication.
                A few commenters also stated that services such as interprofessional
                consultation and chronic care RPM should not be separately billable in
                the same month as PCM by the same practitioner for the same
                beneficiary. Others disagreed, stating the RPM and interprofessional
                consultations describe distinct services not accounted for in the work
                of PCM. RPM in particular was described by these commenters as being
                complimentary to PCM services, rather than duplicative.
                    Commenters requested clarification as to potential overlap between
                PCM and CCM and some commenters suggested that PCM could be billed
                concurrent with CCM for the same beneficiary, if billed by different
                practitioners. Commenters also requested that CMS clarify any potential
                overlap between PCM and HCPCS code GPC1X (Visit complexity inherent to
                evaluation and management 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, or complex chronic condition. (Add-on
                code, list separately in addition to office/outpatient evaluation and
                management visit, new or established).
                    Response: We do not believe there will be a duplication of care
                management between PCM and other care management services solely as a
                result of separate payment for the new PCM codes, particularly with the
                revised list of required elements which better distinguish PCM services
                from CCM. However, we also agree with commenters that PCM services
                should not be furnished with other care management services by the same
                practitioner for the same beneficiary, nor should PCM services be
                furnished at the same time as interprofessional consultations for the
                same condition by the same practitioner for the same patient. However,
                we are convinced by stakeholders who stated that RPM services are
                distinct from PCM and could be billed concurrently by the same
                practitioner for the same beneficiary provided that the time is not
                counted twice. We will also be monitoring billing of these services. We
                will appreciate continued input and engagement on these issues with the
                public and stakeholder community, and may make refinements to these
                policies in future rulemaking.
                    With regard to the relationship between PCM services and HCPCS code
                GPC1X, we do not believe there is any overlap. We note that PCM
                describes ongoing care management services and is billed monthly,
                whereas HCPCS code GPC1X is an adjustment to an office/outpatient E/M
                visit (which are separately billable alongside PCM) to capture
                additional resource costs associated with performing either a primary
                care visit or a visit that is part of ongoing care of a patients
                single, serious, or complex condition.
                    Comment: A commenter requested that RHCs and FQHCs be allowed to
                furnish and report PCM services.
                    Response: We thank the commenter for the suggestion. While we did
                not propose a new mechanism for RHCs and FQHCs to report PCM services
                specifically, we recognize that the requirements for the new PCM codes
                are similar to the requirements for the services described by HCPCS
                code G0511, which is the RHC/FQHC-specific general care management
                code, and will consider adding PCM to G0511 in future rulemaking.
                5. Chronic Care Remote Physiologic Monitoring Services
                    Chronic care remote physiologic monitoring (RPM) services involve
                the collection, analysis, and interpretation of digitally collected
                physiologic data, followed by the development of a treatment plan, and
                the managing of a patient under the treatment plan. The current CPT
                code 99457 is a treatment management code, billable after 20 minutes or
                more of clinical staff/physician/other qualified professional time with
                a patient in a calendar month.
                    In September 2018, the CPT Editorial Panel revised the CPT code
                structure for CPT code 99457 effective beginning CY 2020. The new code
                structure retains CPT code 99457 as a base code that describes the
                first 20 minutes of the treatment management services, and uses a new
                add-on code to describe subsequent 20 minute intervals of the service.
                The new code descriptors for CY 2020 are: CPT code 99457 (Remote
                physiologic monitoring treatment management services, clinical staff/
                physician/other qualified health care professional time in a calendar
                month requiring interactive communication with the patient/caregiver
                during the month; initial 20 minutes) and CPT code 99458 (Remote
                physiologic monitoring treatment management services, clinical staff/
                physician/other qualified health care professional time in a calendar
                month requiring interactive communication with the patient/caregiver
                during the month; additional 20 minutes).
                    In considering the work RVUs for the new add-on CPT code 99458, we
                first considered the value of its base code. We previously valued the
                base code at 0.61 work RVUs. Given the value of the base code, we did
                not agree with the RUC-recommended work RVU of 0.61 for CPT code 99458.
                Instead, we proposed a work RVU of 0.50 for the add-on code, which we
                believed was supported by CPT code 88381 (Microdissection (i.e., sample
                preparation of microscopically identified target); manual) and which
                has the same intraservice and total times of 20 minutes with an XXX
                global period and work RVU of 0.53, as well as the survey value at the
                25th percentile. We proposed the RUC-recommended direct PE inputs for
                CPT code 99458.
                    Finally, we proposed that RPM services could be furnished under
                general supervision. Because care management services include
                establishing, implementing, revising, or monitoring treatment plans, as
                well as providing support services, and because
                [[Page 62698]]
                RPM services include establishing, implementing, revising, and
                monitoring a specific treatment plan for a patient related to one or
                more chronic conditions that are monitored remotely, we believed that
                CPT codes 99457 and 99458 should be included as designated care
                management services. Designated care management services can be
                furnished under general supervision. Section 410.26(b)(5) of our
                regulations states that designated care management services can be
                furnished under the general supervision of the ``physician or other
                qualified health care professional (who is qualified by education,
                training, licensure/regulation and facility privileging)'' (see also
                2019 CPT Codebook, page xii) when these services or supplies are
                provided incident to the services of a physician or other qualified
                healthcare professional. The physician or other qualified healthcare
                professional supervising the auxiliary personnel need not be the same
                individual treating the patient more broadly. However, only the
                supervising physician or other qualified healthcare professional may
                bill Medicare for incident to services.
                    We received public comments on the proposed valuation of the RPM
                add-on CPT code 99458 and our proposal to designate CPT codes 99457 and
                99458 as care management services. The following is a summary of the
                comments we received in response to our two proposals, as well as our
                responses.
                    Comment: We received numerous comments regarding our valuation of
                the new RPM code, CPT code 99458. Commenters uniformly disagreed with
                our proposed work RVU of 0.50 writing that there are no efficiencies to
                be gained when continuing the same treatment management service for an
                additional 20 minutes. Some commenters questioned our use of CPT code
                88381 (Microdissection (i.e., sample preparation of microscopically
                identified target); manual) as a reference code, a code that does not
                resemble the work and the intensity of the work furnished during a care
                management session.
                    Response: We thank the many commenters for their insights into the
                work required for CPT codes 99457 and 99458.
                    Comment: Commenters uniformly agreed with our proposal to designate
                CPT codes 99457 and 99458 as care management services so that the
                services can be furnished under general supervision.
                    Response: We agree with commenters that the add-on code requires
                the same work time and intensity as the RPM base code. Therefore, we
                are finalizing the RUC-recommended work RVU 0.61 for CPT code 99458. We
                are also finalizing the RUC-recommended direct PE. In addition, we are
                finalizing our proposal to designate both CPT code 99457 and CPT code
                99458 care management codes as defined in Sec.  410.26(b)(5) of our
                regulations.
                    Comment: Several commenters expressed concerns about the ambiguity
                of the code descriptors for the RPM codes. Commenters requested that
                CMS define what is meant by ``physiologic parameters'', ``digitally
                transmitted data'' (as opposed to patient-reported data), ``medical
                device,'' and ``interactive communication''. Several commenters asked
                if we could expand the list of practitioners allowed to furnish RPM
                services, while others requested that we clarify who can furnish and
                bill for the RPM services. One commenter stated that the prefatory
                language for the codes should state explicitly that an established
                patient-practitioner relationship must exist prior to billing for RPM
                services. Another commenter recommended that we provide guidance
                related to billing and documentation for RPM. Some commenters
                questioned whether the codes could be used for patients that without
                chronic conditions.
                    Response: We appreciate the many questions raised by commenters
                about the set of RPM codes and understand the frustration commenters
                expressed with the current code descriptors. Therefore, given the
                numerous questions raised by commenters, we plan to consider these and
                other questions related to RPM in future rulemaking.
                    Comment: We received a few comments asking whether RPM is a
                billable service in RHCs and FQHCs.
                    Response: RHCs are paid an all-inclusive rate (AIR) when a
                medically necessary, face-to-face visit is furnished by an RHC
                practitioner. FQHCs are paid the lesser of their charges or the FQHC
                PPS rate when a medically-necessary, face-to-face visit is furnished by
                an FQHC practitioner. Both the RHC AIR and the FQHC PPS rate include
                all services and supplies furnished incident to the visit. Services
                such as RPM are not separately billable because they are already
                included in the RHC AIR or FQHC PPS payment.
                6. Comment Solicitation on Consent for Communication Technology-Based
                Services
                    In the CY 2019 PFS final rule, we finalized separate payment for a
                number of services that could be furnished via telecommunications
                technology. Specifically, we finalized HCPCS code G2010 (Remote
                evaluation of recorded video and/or images submitted by an established
                patient (e.g., store and forward), including interpretation with
                follow-up with the patient within 24 business hours, not originating
                from a related E/M service provided within the previous 7 days nor
                leading to an E/M service or procedure within the next 24 hours or
                soonest available appointment)), HCPCS code G2012 (Brief communication
                technology-based service, e.g., virtual check-in, by a physician or
                other qualified health care professional who can report evaluation and
                management services, provided to an established patient, not
                originating from a related E/M service provided within the previous 7
                days nor leading to an E/M service or procedure within the next 24
                hours or soonest available appointment; 5-10 minutes of medical
                discussion)), CPT codes 99446-99449 (Interprofessional telephone/
                internet/electronic health record assessment and management service
                provided by a consultative physician, including a verbal and written
                report to the patient's treating/requesting physician or other
                qualified health care professional), CPT code 99451 (Interprofessional
                telephone/internet/electronic health record assessment and management
                service provided by a consultative physician, including a written
                report to the patient's treating/requesting physician or other
                qualified health care professional, 5 minutes or more of medical
                consultative time), and CPT code 99452 (Interprofessional telephone/
                internet/electronic health record referral service(s) provided by a
                treating/requesting physician or other qualified health care
                professional, 30 minutes).
                    As discussed in that rule, (83 FR 59490 through 59491), while a few
                commenters suggested that it would be less burdensome to obtain a
                general consent for multiple services at once, we stipulated that
                verbal consent must be documented in the medical record for each
                service furnished so that the beneficiary is aware of any applicable
                cost sharing. This is similar to the requirements for other non-face-
                to-face care management services under the PFS.
                    We have continued to hear from stakeholders that requiring advance
                beneficiary consent for each of these services is burdensome. For HCPCS
                codes G2010 and G2012, stakeholders have stated that it is difficult
                and burdensome to obtain consent at the outset of each of what are
                meant to be brief check-in services. For CPT codes 99446-99449, 99451
                and 99452, practitioners have informed us that it is
                [[Page 62699]]
                particularly difficult for the consulting practitioner to obtain
                consent from a patient they have never seen. Given our longstanding
                goals to reduce burden and promote the use of communication technology-
                based services (CTBS), we sought comment in the CY 2020 PFS proposed
                rule on whether a single advance beneficiary consent could be obtained
                for a number of communication technology-based services. During the
                consent process, the practitioner will make sure the beneficiary is
                aware that utilization of these services will result in a cost sharing
                obligation. We solicited comment on the appropriate interval of time or
                number of services for which consent could be obtained, for example,
                for all these services furnished within a 6-month or 1-year period, or
                for a set number of services, after which a new consent will need to be
                obtained. We also solicited comment on the potential program integrity
                concerns associated with allowing advance consent and how best to
                minimize those concerns.
                    We received public comments on the appropriate interval of time or
                number of services for which consent could be obtained and the
                potential program integrity concerns associated with allowing advance
                consent and how best to minimize those concerns. The following is a
                summary of the comments we received and our responses.
                    Comment: Many commenters supported requiring a generalized consent
                for multiple communication technology-based services or
                interprofessional consultations. Most commenters suggested that a year
                was an appropriate interval for which consent should be obtained,
                although some commenters suggested other time intervals, such as every
                6 months, quarterly, or no requirement at all.
                    A few commenters suggested that there should be separate consent
                processes for services that involve an interaction with the patient,
                such as HCPCS codes G2010 to report the remote evaluation of recorded
                video and/or images for an established patient and G2012 to report
                brief communication technology-based service for an established
                patient, and services that do not involve direct interaction with the
                patient, such as CPT codes 99446 through 99449, 99451 and 99452, which
                describe services such as electronic assessment and management by a
                consultative physician.
                    Other commenters raised more general concerns with beneficiary cost
                sharing, pointing out that beneficiaries may not be accustomed to being
                charged cost sharing for non-face-to-face services. These commenters
                urged CMS to eliminate cost sharing for these services.
                    Response: We appreciate commenters' support for allowing a single
                consent to be obtained for multiple CTBS or interprofessional
                consultation services over an interval of time, rather than requiring
                consent to be obtained prior to each service. Given the commenters'
                support, we are finalizing a policy to permit a single consent to be
                obtained for multiple CTBS or interprofessional consultation services.
                Based on feedback from commenters, we believe an appropriate interval
                for the single consent is one year, and we are finalizing that the
                single consent must be obtained at least annually. We will continue to
                consider whether a separate consent should be obtained for services
                that involve direct interaction between the patient and practitioner,
                and those that do not involve interaction such as interprofessional
                services; and we may address this issue in potential future rulemaking.
                    We also appreciate commenters' continued concerns about the burden
                associated with cost sharing for CTBS and interprofessional
                consultation services. Although we do not have statutory authority to
                eliminate cost sharing for these services, we appreciate the continued
                input from the public as to how best to educate both practitioners and
                beneficiaries to reduce instances of unexpected bills.
                7. Rural Health Clinics (RHCs) and Federally-Qualified Health Centers
                (FQHCs)
                    RHCs and FQHCs are paid for general care management services using
                HCPCS code G0511, which is an RHC and FQHC-specific G-code for 20
                minutes or more of CCM services, complex CCM services, CCM furnished by
                a physician or other qualified health care professional, or general
                behavioral health services, and we are allowing G0511 to also be billed
                when the requirements for PCM are met. Payment for this service is set
                at the average of the national, non-facility payment rates for CPT
                codes 99490, 99487, 99491, and 99484. We proposed to use the non-
                facility payment rates for HCPCS codes GCCC1 and GCCC3 instead of the
                non-facility payment rates for CPT codes 99490 and 99487, respectively,
                if these changes were finalized for practitioners billing under the
                PFS; as indicated above, these codes were not finalized. We note that
                we did not propose any changes in the valuation of these codes.
                    Comment: Regarding the use HCPCS codes GCCC1 and GCCC3, commenters
                noted they would be supportive of this change if they were finalized
                for practitioners billing under the PFS for RHCs and FQHCs.
                    Response: Since HCPCS codes GCCC1 and GCCC3 are not being finalized
                for use under the PFS, we are not finalizing this change for RHCs and
                FQHCs. Therefore, payment for HCPCS G0511 will continue to set based on
                the average of the national, non-facility payment rates for CPT codes
                99490, 99487, 99491, and 99484.
                L. Coinsurance for Colorectal Cancer Screening Tests
                    Section 1861(pp) of the Act defines ``colorectal cancer screening
                tests'' and, under sections 1861(pp)(1)(B) and (C) of the Act,
                ``screening flexible sigmoidoscopy'' and ``screening colonoscopy'' are
                two of the recognized procedures. Among other things, section
                1861(pp)(1)(D) of the Act authorizes the Secretary to include other
                tests or procedures in the definition, and modifications to the tests
                and procedures described under this subsection, ``with such frequency
                and payment limits, as the Secretary determines appropriate, in
                consultation with appropriate organizations.'' Section 1861(s)(2)(R) of
                the Act includes these colorectal cancer screening tests in the
                definition of the medical and other health services that fall within
                the scope of Medicare Part B benefits described in section 1832(a)(1)
                of the Act. Section 1861(ddd)(3) of the Act includes these colorectal
                cancer screening services within the definition of ``preventive
                services.'' In addition, section 1833(a)(1)(Y) of the Act provides for
                payment for preventive services recommended by the United States
                Preventive Services Task Force (USPSTF) with a grade of A or B under
                the PFS at 100 percent of the lesser of the actual charge or the fee
                schedule amount for these colorectal cancer screening tests, and under
                the OPPS at 100 percent of the OPPS payment amount. As such, there is
                no beneficiary responsibility for coinsurance for recommended
                colorectal cancer screening tests as defined in section 1861(pp)(1) of
                the Act.
                    Under these statutory provisions, we have issued regulations
                governing payment for colorectal cancer screening tests at 42 CFR
                410.152(l)(5). We pay 100 percent of the Medicare payment amount
                established under the applicable payment methodology for the setting
                for providers and suppliers, and beneficiaries are not required to pay
                Part B coinsurance.
                    In addition to screening tests, which typically are furnished to
                patients in the absence of signs or symptoms of illness
                [[Page 62700]]
                or injury, Medicare also covers various diagnostic tests (Sec.
                410.32). In general, diagnostic tests must be ordered by the physician
                or practitioner who is treating the beneficiary, and who uses the
                results of the diagnostic test in the management of the patient's
                specific medical problem. Under Part B, Medicare may cover flexible
                sigmoidoscopies and colonoscopies as diagnostic tests when those tests
                are reasonable and necessary as specified in section 1862(a)(1)(A) of
                the Act. When these services are furnished as diagnostic tests rather
                than as screening tests, patients are responsible for the Part B
                coinsurance (normally 20 percent) associated with these services.
                    We define ``colorectal cancer screening tests'' in our regulation
                at Sec.  410.37(a)(1) to include ``flexible screening sigmoidoscopies''
                and ``screening colonoscopies, including anesthesia furnished in
                conjunction with the service.'' Under our current policies, we exclude
                from the definition of colorectal screening services colonoscopies and
                sigmoidoscopies that begin as a screening service, but where a polyp or
                other growth is found and removed as part of the procedure. The
                exclusion of these services from the definition of colorectal cancer
                screening services is based upon separate provisions of the statute
                dealing with the detection of lesions or growths during procedures (62
                FR 59048, 59082, October 31, 1997). Section 1834(d)(2)(D) of the Act
                provides that if, during the course of a screening flexible
                sigmoidoscopy, a lesion or growth is detected which results in a biopsy
                or removal of the lesion or growth, payment under Medicare Part B shall
                not be made for the screening flexible sigmoidoscopy but shall be made
                for the procedure classified as a flexible sigmoidoscopy with such
                biopsy or removal. Similarly, section 1834(d)(3)(D) of the Act that
                provides if, during the course of a screening colonoscopy, a lesion or
                growth is detected which results in a biopsy or removal of the lesion
                or growth, payment under Medicare Part B shall not be made for the
                screening colonoscopy but shall be made for the procedure classified as
                a colonoscopy with such biopsy or removal.
                    Because we interpret sections 1834(d)(2)(C)(ii) and
                1834(d)(3)(C)(ii) of the Act to require us to pay for these tests as
                diagnostic tests, rather than as screening tests, the 100 percent
                payment rate for recommended preventive services under section
                1833(a)(1)(Y) of the Act, as codified in our regulation at Sec.
                410.152(l)(5), would not apply to those diagnostic procedures. As such,
                beneficiaries are responsible for the usual coinsurance that applies to
                the services (20 or 25 percent of the cost of the services depending on
                the setting).
                    Under section 1833(b) of the Act, before making payment under
                Medicare Part B for expenses incurred by a beneficiary for covered Part
                B services, beneficiaries must first meet the applicable deductible for
                the year. Section 4104 of the Affordable Care Act (that is, the Patient
                Protection and Affordable Care Act (Pub L. 111-148, enacted March 23,
                2010), and the Health Care and Education Reconciliation Act of 2010
                (Pub. L. 111-152, enacted March 30, 2010), collectively referred to as
                the ``Affordable Care Act'') amended section 1833(b)(1) of the Act to
                make the deductible inapplicable to expenses incurred for certain
                preventive services that are recommended with a grade of A or B by the
                USPSTF, including colorectal cancer screening tests as defined in
                section 1861(pp) of the Act. Section 4104 of the Affordable Care Act
                also added a sentence at the end of section 1833(b)(1) of the Act
                specifying that the exception to the deductible shall apply with
                respect to a colorectal cancer screening test regardless of the code
                that is billed for the establishment of a diagnosis as a result of the
                test, or for the removal of tissue or other matter or other procedure
                that is furnished in connection with, as a result of, and in the same
                clinical encounter as the screening test. Although the Affordable Care
                Act addressed the applicability of the deductible in the case of a
                colorectal cancer screening test that involves biopsy or tissue
                removal, it did not alter the coinsurance provision in section 1833(a)
                of the Act for such procedures. Although public commenters encouraged
                the agency to also eliminate the coinsurance in these circumstances,
                the agency found that the statute did not provide for elimination of
                the coinsurance (75 FR 73170, 73431, November 29, 2010).
                    Beneficiaries have continued to contact us noting their
                ``surprise'' that a coinsurance (20 or 25 percent depending on the
                setting) applies when they expected to receive a colorectal screening
                procedure to which coinsurance does not apply, but instead received
                what Medicare considers to be a diagnostic procedure because polyps
                were discovered and removed. Similarly, physicians have also expressed
                concerns about the reactions of beneficiaries when they are informed
                that they will be responsible for coinsurance if polyps are discovered
                and removed during what they expected to be a screening procedure to
                which coinsurance does not apply. Other stakeholders and some members
                of Congress have regularly expressed to us that they consider the
                agency's policy on coinsurance for colorectal screening procedures
                during which tissue is removed to be a misinterpretation of the law.
                    Over the years, we have released a wide variety of publicly
                available educational materials that explain the Medicare preventive
                services benefits as part of our overall outreach activities to
                Medicare beneficiaries. These materials contain a complete description
                of the Medicare preventive services benefits, including information on
                colorectal cancer screening, and also provide relevant details on the
                applicability of cost sharing. These materials are available at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/MLN-Publications-Items/CMS1243319.html. We believe that the
                information in these materials can be instrumental in continuing to
                educate physicians and beneficiaries about cost sharing obligations in
                order to mitigate instances of ``surprise'' billing. In the CY 2020 PFS
                proposed rule (84 FR 40556), we solicited comment on whether we should
                consider establishing a requirement that the physician who plans to
                furnish a colorectal cancer screening notify the patient in advance
                that a screening procedure could result in a diagnostic procedure if
                polyps are discovered and removed, and that coinsurance may apply.
                Specifically, we solicited comment on whether we should require the
                physician, or their staff, to provide a verbal notice with a notation
                in the medical record, or whether we should consider a different
                approach to informing patients of the copay implications, such as a
                written notice with standard language that we would require the
                physician, or their staff, to provide to patients prior to a colorectal
                cancer screening. We also solicited comment on what mechanism, if any,
                we should consider using to monitor compliance with a notification
                requirement if we decide to finalize one for CY 2020 or through future
                rulemaking.
                    We received over 1,600 public comments on the requirements for
                coinsurance for colorectal cancer screening tests.
                    Comment: Many comments were on coverage and statutory issues, such
                as coverage for colorectal cancer screening more frequently and not
                requiring coinsurance for diagnostic colonoscopy.
                    Response: These comments are out of scope.
                [[Page 62701]]
                    Comment: Many commenters were on professionals providing
                information to individuals receiving a screening colonoscopies. Several
                commenters noted that Medicare could do a better job of educating
                beneficiaries about when screening colonoscopies become diagnostic
                colonoscopies, and therefore, coinsurance applies. In addition to not
                understanding that when removal of a polyp, lesion or growth is
                discovered a screening colonoscopy becomes a diagnostic one, some
                commenters misunderstood that a screening colonoscopy can only occur
                every 10 years for most individuals, or the appropriate frequency for a
                high risk individual. Many commenters were confused that a diagnostic
                colonoscopy occurs after a positive Cologuard[supreg] or fetal occult
                blood tests rather than a screening colonoscopy.
                    Response: As a result of our review of the public comments, we
                intend to undertake a comprehensive review of all of our outreach
                materials, such as the Medicare & You Handbook and Medicare Preventive
                Services, to see if Medicare policies on payment and coverage for
                screening colonoscopies can be made clearer. We believe this would be a
                service to Medicare beneficiaries.
                M. Therapy Services
                1. Repeal of the Therapy Caps and Limitation To Ensure Appropriate
                Therapy
                a. Background
                    In the CY 2019 PFS proposed and final rules (83 FR 34850; 83 FR
                59654 and 59661), we discussed the statutory requirements of section
                50202 of the Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-
                123, February 9, 2018). Beginning January 1, 2018, section 50202 of the
                BBA of 2018 repealed the Medicare outpatient therapy caps and the
                therapy cap exceptions process, while retaining the cap amounts as
                limitations and requiring medical review to ensure that therapy
                services are furnished when appropriate. Section 50202 of the BBA of
                2018 amended section 1833(g) of the Act by adding a new paragraph
                (7)(A) requiring that after expenses incurred for the beneficiary's
                outpatient therapy services for the year have exceeded one or both of
                the previous therapy cap amounts, all therapy suppliers and providers
                must continue to use an appropriate modifier on claims. We implemented
                this provision by continuing to require use of the existing KX
                modifier. By using the KX modifier on the claim, the therapy supplier
                or provider is attesting that the services are medically necessary and
                that supportive justification is documented in the medical record. As
                with the incurred expenses for the prior therapy cap amounts, there is
                one amount for physical therapy (PT) and speech language pathology
                (SLP) services combined, and a separate amount for occupational therapy
                (OT) services. These KX modifier threshold amounts are indexed annually
                by the Medicare Economic Index (MEI). After the beneficiary's incurred
                expenditures for outpatient therapy services exceed the KX modifier
                threshold amount for the year, claims for outpatient therapy services
                without the KX modifier are denied.
                    Section 50202 of the BBA of 2018 also added a new paragraph 7(B) to
                section 1833(g) of the Act which retained the targeted medical review
                (MR) process for 2018 and subsequent years, but established a lower
                threshold amount of $3,000 rather than the $3,700 threshold amount that
                had applied for the original manual MR process established by section
                3005(g) of the Middle Class Tax Relief and Jobs Creation Act of 2012
                (MCTRJCA) (Pub. L. 112-96, February 22, 2012). The manual MR process
                with a threshold amount of $3,700 was replaced by the targeted MR
                process with the same threshold amount through amendments made by
                section 202 of the Medicare Access and CHIP Reauthorization Act of 2015
                (MACRA) (Pub. L. 114-10, April 16, 2015).
                    With the latest amendments made by the BBA of 2018, for CY 2018
                (and each successive calendar year until 2028, at which time it is
                indexed annually by the MEI), the MR threshold is $3,000 for PT and SLP
                services and $3,000 for OT services. For purposes of applying the
                targeted MR process, we use a criteria-based process for selecting
                providers and suppliers that includes factors such as a high percentage
                of patients receiving therapy beyond the medical review threshold as
                compared to peers. For information on the targeted medical review
                process, please visit https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/TherapyCap.html.
                    In the CY 2019 PFS final rule (83 FR 59661), when discussing our
                tracking and accrual process for outpatient therapy services in the
                section on the KX Threshold Amounts, we noted that we track each
                beneficiary's incurred expenses for therapy services annually by
                applying the PFS-based payment amount for each service less any
                applicable multiple procedure reduction for CMS-designated ``always
                therapy'' services. We also stated that we use the PFS rates to accrue
                expenses for therapy services provided in critical access hospitals
                (CAHs) as required by section 1833(g)(6)(B) of the Act, added by
                section 603(b) of the American Taxpayer Relief Act of 2012 (ATRA) (Pub.
                L. 112-240, January 2, 2013). As discussed below, we mistakenly
                indicated that this statutory requirement was extended by subsequent
                legislation, including section 50202 of the BBA of 2018.
                b. Summary of Proposed Regulatory Revisions
                    While we explained and implemented the changes required by section
                50202 of the BBA of 2018 in CY 2019 PFS rulemaking (83 FR 34850; 83 FR
                59654 and 59661), we did not codify those changes in regulation text.
                In the CY 2020 PFS proposed rule, we proposed to revise the regulations
                at Sec. Sec.  410.59 (outpatient occupational therapy) and 410.60
                (physical therapy and speech-language pathology) to incorporate the
                changes made by section 50202 of the BBA of 2018. Specifically, we
                proposed to add a new paragraph (e)(1)(v) to Sec. Sec.  410.59 and
                410.60 to clarify that the specified amounts of annual per-beneficiary
                incurred expenses are no longer applied as limitations but as threshold
                amounts above which services require, as a condition of payment,
                inclusion of the KX modifier; and that use of the KX modifier confirms
                that the services are medically necessary as justified by appropriate
                documentation in the patient's medical record. We proposed to amend
                paragraph (e)(2) in Sec. Sec.  410.59 and 410.60 to specify the therapy
                services and amounts that are accrued for purposes of applying the KX
                modifier threshold, including the continued accrual of therapy services
                furnished by CAHs directly or under arrangements at the PFS-based
                payment rates. We also proposed to amend paragraph (e)(3) in Sec. Sec.
                410.59 and 410.60 for the purpose of applying the medical review
                threshold to clarify the threshold amounts and the applicable years for
                both the manual MR process originally established through section
                3005(g) of MCTRJCA and the targeted MR process established by the
                MACRA, and including the changes made through section 50202 of the BBA
                of 2018 as discussed previously.
                    In the CY 2019 PFS final rule (83 FR 59661), we incorrectly stated
                that section 1833(g)(6)(B) of the Act continues to require that we
                accrue expenses for therapy services furnished by CAHs at the PFS rate
                because the provision, originally added by section 603(b) of the ATRA,
                was extended by subsequent legislation, including section 50202 of the
                BBA of 2018. The
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                requirement in section 1833(g)(6)(B) of the Act was actually time-
                limited to services furnished in CY 2013. To apply the therapy caps
                (and now the KX modifier thresholds) after the expiration of the
                requirement in 1833(g)(6)(B) of the Act, we needed a process to accrue
                the annual expenses for therapy services furnished by CAHs and, in the
                CY 2014 PFS final rule with comment period, we elected to continue the
                process prescribed in section 1833(g)(6)(B) of the Act (78 FR 74405
                through 74410).
                    We received public comments on the proposed revisions to regulation
                text to codify the changes required by section 50202 of the BBA of
                2018. The following is a summary of the comments we received and our
                responses.
                    Comment: Several commenters appreciated our proposal to clarify and
                codify the requirements as outlined in section 50202 of the BBA of
                2018.
                    Response: We thank commenters for their support.
                    After considering the comments, we are finalizing as proposed the
                changes in regulation text to reflect the requirements of section 50202
                of the BBA of 2018.
                2. Payment for Outpatient PT and OT Services Furnished by Therapy
                Assistants
                a. Background
                    Section 53107 of the BBA of 2018 added a new subsection 1834(v) to
                the Act to require in paragraph (1) that, for services furnished on or
                after January 1, 2022, payment for outpatient physical and occupational
                therapy services for which payment is made under sections 1848 or
                1834(k) of the Act which are furnished in whole or in part by a therapy
                assistant must be paid at 85 percent of the amount that is otherwise
                applicable. Section 1834(v)(2) of the Act further required that we
                establish a modifier to identify these services by January 1, 2019, and
                that claims for outpatient therapy services furnished in whole or in
                part by a therapy assistant must include the modifier effective for
                dates of service beginning on January 1, 2020. Section 1834(v)(3) of
                the Act required that we implement the subsection through notice and
                comment rulemaking.
                    In the CY 2019 PFS proposed and final rules (83 FR 35850 through
                35852 and 83 FR 59654 through 50660, respectively), we established two
                modifiers--one to identify services furnished in whole or in part by a
                physical therapist assistant (PTA) and the other to identify services
                furnished in whole or in part by an occupational therapy assistant
                (OTA). The modifiers are defined as follows:
                     CQ Modifier: Outpatient physical therapy services
                furnished in whole or in part by a physical therapist assistant.
                     CO Modifier: Outpatient occupational therapy services
                furnished in whole or in part by an occupational therapy assistant.
                    In the CY 2019 PFS final rule, we clarified that the CQ and CO
                modifiers are required to be used when applicable for services
                furnished on or after January 1, 2020, on the claim line of the service
                alongside the respective GP or GO therapy modifier to identify services
                furnished under a PT or OT plan of care. The GP and GO therapy
                modifiers, along with the GN modifier for speech-language pathology
                (SLP) services, have been used since 1998 to track and accrue the per-
                beneficiary incurred expenses amounts to different therapy caps, now KX
                modifier thresholds, one amount for PT and SLP services combined and a
                separate amount for OT services. We also clarified in the CY 2019 PFS
                final rule that the CQ and CO modifiers will trigger application of the
                redu