2025-13271: Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program

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-1832-P, P.O. Box 8016, Baltimore, MD 21244-8016. Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to

the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1832-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

A. Purpose

This major annual rule proposes to revise payment policies under the Medicare PFS and makes other policy changes, including proposals to implement certain provisions of the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119-4, March 15, 2025), Further Continuing Appropriations and Other Extensions Act of 2024 (Pub. L. 118-22, November 16, 2023), Consolidated Appropriations Act, 2023 (Pub.

L. 117-328, September 29, 2022), Inflation Reduction Act of 2022 (IRA)

(Pub. L. 117-169, August 16, 2022), Consolidated Appropriations Act, 2022 (Pub. L. 117-103, March 15, 2022), Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 116-260, December 27, 2020), Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-123, February 9, 2018) and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271, October 24, 2018), related to Medicare Part B payment. In addition, this proposed rule includes proposals regarding other Medicare payment policies described in sections III. and IV. This rulemaking proposes to update policies for the Medicare Prescription Drug Inflation Rebate Program codified or finalized at parts 427 and 428 consistent with sections 1847A(i) and 1860D-14B of the Social Security Act (the Act). With respect to the Medicare Part B Drug Inflation Rebate Program, this rulemaking proposes to describe the identification of payment amount benchmark quarter in certain instances and the calculation for the Part B rebate amount in such instances. With respect to the Medicare Part D Drug Inflation Rebate Program, this rulemaking proposes to clarify the calculation of a Part D rebate amount, and proposes a methodology for removal of units for a Part D rebatable drug for which a manufacturer provides a discount under the 340B Program, as well as the establishment of a 340B data repository for Part D claims. This rulemaking proposes to modify policies for the Shared Savings Program, which is a voluntary program that started in 2012. The program allows healthcare providers to form or participate in Accountable Care Organizations (ACOs), to be held accountable for the quality and total cost of care for an assigned population of Medicare fee-for-service (FFS) beneficiaries.

B. Summary of the Key Provisions

Section 1848 of the Act 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 each year we establish, by regulation, the payment amounts for physicians' services paid under the PFS, including geographic adjustments to reflect the variations in the costs of furnishing services in different geographic areas. In this major proposed rule, we are proposing to establish RVUs for CY 2026 for the PFS to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This proposed rule also includes discussions and provisions regarding several other Medicare Part B payment policies, and other policies regarding programs administered by CMS. Specifically, this proposed rule addresses: Background (section II.A.) Determination of PE RVUs (section II.B.) Potentially Misvalued Services Under the PFS (section II.C.) Payment for Medicare Telehealth Services Under Section 1834(m) of the Act (section II.D.) Valuation of Specific Codes (section II.E.) Evaluation and Management (E/M) Visits (section II.F.) Enhanced Care Management (section II.G.) Outpatient Therapy Services and KX Modifier Thresholds (section II.H.) Advancing Access to Behavioral Health Services (section II.I.) Provisions on Medicare Parts A and B Payment for Dental Services Inextricably Linked to Specific Covered Services (section II.J.) Payment for Skin Substitutes (section II.K.) Strategies for Improving Global Surgery Payment Accuracy (section II.L.) Determination of Malpractice Relative Value Units (RVUs) (section II.M.) Geographic Practice Cost Indices (GPCIs) (section II.N.) Drugs and Biological Products Paid Under Medicare Part B (section III.A.) Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) (section III.B.) [[Page 32354]] Ambulatory Specialty Model (ASM) (section III.C.) Medicare Diabetes Prevention Program (MDPP) (section III.D.) Medicare Prescription Drug Inflation Rebate Program (section III.E.) Medicare Shared Savings Program (section III.F.) Changes to the Regulations Associated with the Ambulance Fee Schedule (section III.G.) Updates to the Quality Payment Program and Medicare Promoting Interoperability Program (section IV.) Collection of Information Requirements (section V.) Responses to Comments (section VI.) Regulatory Impact Analysis (section VII.)

C. Summary of Costs and Benefits

Based on our estimates, the Office of Information and Regulatory Affairs in the Office of Management and Budget has determined that this proposed rule is economically significant under section 3(f)(1) of Executive Order 12866. As required by section 1848(d)(1)(A) of the Act, beginning in 2026, there will be two separate conversion factors (CFs): one for items and services furnished by a qualifying APM participant as defined in section 1833(z)(2) of the Act (referred to as the qualifying APM conversion factor) and another for other items and services (referred to as the nonqualifying APM conversion factor), equal to the respective conversion factor for the previous year (or, for CY 2026, equal to the single conversion factor for CY 2025) multiplied by the update established under section 1848(d)(20) of the Act for such respective conversion factor for such year. Under these proposals, the 2026 qualifying APM conversion factor represents a projected increase of $0.39 (1.2 percent) from the current conversion factor of $32.3465. Similarly, the 2026 nonqualifying APM conversion factor represents a projected increase of $0.23 (0.7 percent) from the current conversion factor of $32.3465. For a detailed discussion of the economic impacts, see section VII., Regulatory Impact Analysis, of this proposed rule.

A. Background

In accordance with section 1848 of the Social Security Act (the Act), CMS has paid for physicians' services under the Medicare physician fee schedule (PFS) since January 1, 1992. 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 (OBRA '89) (Pub. L. 101-239, December 19, 1989), and the Omnibus Budget Reconciliation Act of 1990 (OBRA '90) (Pub. L. 101-508, November 5, 1990). The final rule published in the November 25, 1991 Federal Register (56 FR 59502) set forth the first fee schedule used for Medicare payment for physicians' services. We note that throughout this proposed 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. 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 malpractice (MP) expenses, as specified in section 1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a resource-based system for determining PE RVUs for each physicians' service. We develop PE RVUs by considering the direct and indirect practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include administrative labor, office expenses, and all other expenses. The sections that follow provide more detailed information about the methodology for translating the resources involved in furnishing each service into service specific PE RVUs. We refer readers to the CY 2010 Physician Fee Schedule (PFS) final rule with comment period (74 FR 61743 through 61748) for a more detailed explanation of the PE methodology.

2. Practice Expense 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 American Medical Association (AMA) )/Specialty Society Relative Value Scale (RVS) Update Committee (referred to as the RUC) and those provided in response to public comment periods. For a detailed explanation of the direct PE methodology, including examples, we referred readers to the 5-year review of work RVUs under the PFS and proposed changes to the PE methodology in the CY 2007 PFS proposed rule (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 to develop the indirect portion of the PE RVUs. Prior to CY 2010, we primarily used the PE/HR by specialty obtained from the AMA's Socioeconomic Monitoring System (SMS). The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice Information Survey (PPIS). The PPIS is a multispecialty, nationally representative, PE survey of 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 have stated that 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 or how the PE/HR data are used. 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 is developed based entirely on the PPIS data, except as noted in this section. [[Page 32355]] 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 are not separately recognized by Medicare, nor do we have a method to blend the PPIS data with Medicare- recognized specialty data. Previously, we established PE/HR values for various specialties without SMS or supplemental survey data by crosswalking them to other similar specialties to estimate a proxy PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked PE/HR, we instead used the PPIS based PE/HR. We use crosswalks for specialties that did not participate in the PPIS. These crosswalks have been generally established through notice and comment rulemaking and are available in the file titled ``CY 2026 PFS proposed rule PE/HR'' on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. For CY 2026, we have incorporated the available utilization data for one new specialty, Epileptologists, which we recognized effective July 1, 2024 through our established process. We are proposing to use proxy PE/HR values from Neurology for this new specialty, as there are no PPIS data for this specialty. These updates are reflected in the ``CY 2026 PFS proposed rule PE/ HR'' file available on the CMS website under the supporting data files for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. c. Allocation of PE to Services To establish PE RVUs for specific services, it is necessary to establish the direct and indirect PE associated with each service. (1) Direct Costs The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative relationship between the sum of the direct cost resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing each of the services. The costs of these resources are calculated from the refined direct PE inputs in our PE database. For example, if one service has a direct cost sum of $400 from our PE database and another service has a direct cost sum of $200, the direct portion of the PE RVUs of the first service would be twice as much as the direct portion of the PE RVUs for the second service. (2) Indirect Costs We allocate the indirect costs at the code level based on the direct costs specifically associated with a code and the greater of either the clinical labor costs or the work RVUs. We also incorporate the survey data described earlier in the PE/HR discussion. The general approach to developing the indirect portion of the PE RVUs is as follows: For a given service, we use the direct portion of the PE RVUs calculated as previously described and the average percentage that direct costs represent of total costs (based on survey data) across the specialties that furnish the service to determine an initial indirect allocator. That is, the initial indirect allocator is calculated so that the direct costs equal the average percentage of direct costs of those specialties furnishing the service. For example, if the direct portion of the PE RVUs for a given service is 2.00 and direct costs, on average, represent 25 percent of total costs for the specialties that furnish the service, the initial indirect allocator would be calculated so that it equals 75 percent of the total PE RVUs. Thus, in this example, the initial indirect allocator would equal 6.00, resulting in a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 percent of 8.00). Next, we add the greater of the work RVUs or clinical labor portion of the direct portion of the PE RVUs to this initial indirect allocator. In our example, if this service had a work RVU of 4.00 and the clinical labor portion of the direct PE RVU was 1.50, we would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical labor portion) to the initial indirect allocator of 6.00 to get an indirect allocator of 10.00. In the absence of any further use of the survey data, the relative relationship between the indirect cost portions of the PE RVUs for any two services would be determined by the relative relationship between these indirect cost allocators. For example, if one service had an indirect cost allocator of 10.00 and another service had an indirect cost allocator of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as the indirect portion of the PE RVUs for the second service. Then, we incorporate the specialty specific indirect PE/HR data into the calculation. In our example, if, based on the survey data, the average indirect cost of the specialties furnishing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties furnishing the second service with an indirect allocator of 5.00, the indirect portion of the PE RVUs of the first service would be equal to that of the second service. (3) Facility and Nonfacility Costs For procedures that can be furnished in a physician's office, as well as in a facility setting, where Medicare makes a separate payment to the facility for its costs in furnishing a service, we establish two PE RVUs: facility and nonfacility. The methodology for calculating PE RVUs is generally 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. We note, too, that in this proposed rule we are proposing a modification in the allocation of indirect PE, described in detail below. (4) Services With Technical Components and Professional Components Diagnostic services are generally comprised of two components: a [[Page 32356]] professional component (PC); and a technical component (TC). The PC and TC may be furnished independently or by different healthcare 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 direct readers to the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746). We also direct readers to the file titled ``Calculation of PE RVUs under Methodology for Selected Codes'' which is available on our website under downloads for the CY 2026 PFS proposed rule at https://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 an RVU scale for each service. To do this, divide the results of Step 4 by the CF. Note that the actual value of the CF used in this calculation does not influence the final direct cost PE RVUs as long as the same CF is used in Step 4 and Step 5. Different CFs would result in different direct PE scaling adjustments, but this has no effect on the final direct cost PE RVUs since changes in the CFs and 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 three 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 a specialty mix based on the specialties of the practitioners reporting the services in the claims data, we use the expected specialty that we identify on a list developed based on medical review and input from expert interested parties. We display this list of expected specialty assignments as part of the annual set of data files we make available as part of notice and comment rulemaking and consider recommendations from the RUC and other interested parties on changes to this list annually. Services for which the specialty is automatically assigned based on previously finalized policies under our established methodology (for example, ``always therapy'' services) are unaffected by the list of expected specialty assignments. We also finalized in the CY 2018 PFS final rule (82 FR 52982 through 52983) a policy to apply these service-level overrides for both PE and MP, rather than one or the other category. The full list of expected specialty assignments is included in the CY 2026 public use files, which are available on the CMS website under downloads for the CY 2026 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Step 8: Calculate the service level allocators for the indirect PEs based on the percentages calculated in Step 7. The indirect PEs are allocated based on the three components: the direct PE RVUs; the clinical labor PE RVUs; and the work RVUs. For most services the indirect allocator is: indirect PE percentage * (direct PE RVUs/direct percentage) + work RVUs. There are two situations where this formula is modified: If the service is a global service (that is, a service with global, professional, and technical components), then the indirect PE allocator is: indirect percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs + work RVUs. If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the indirect allocator is: indirect PE percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs. (Note: For global services, the indirect PE allocator is based on both the work RVUs and the clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs would be allocated using the work RVUs, and for the TC service, indirect PEs would be allocated using the direct PE RVUs and the clinical labor PE RVUs. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.) For presentation purposes, in the examples in the download file titled ``Calculation of PE RVUs under Methodology for Selected Codes'', the formulas were divided into two parts for each service. The first part does not vary by service and is the indirect percentage (direct PE RVUs/direct percentage). The second part is either the work RVU, clinical labor PE RVU, or both depending on whether the service is a global service and whether the clinical PE RVUs exceed the work RVUs (as described earlier in this step). We note that for CY 2026, we are proposing a change to the methodology so that when work RVUs are used to [[Page 32357]] allocate indirect PE to the facility RVUs, they are assigned at one- half the amount allocated to the nonfacility PE RVUs for that same service. This proposed change is detailed later in this section. Apply a scaling adjustment to the indirect allocators. Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying the result of step 8 by the average indirect PE percentage from the survey data. Step 10: Calculate an aggregate pool of indirect PE RVUs for all PFS services by adding the product of the indirect PE allocators for a service from Step 8 and the utilization data for that service. Step 11: Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indirect allocation does not exceed the available aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step 8. Calculate the indirect practice cost index. Step 12: Using the results of Step 11, calculate aggregate pools of specialty specific adjusted indirect PE allocators for all PFS services for a specialty by adding the product of the adjusted indirect PE allocator for each service and the utilization data for that service. Step 13: Using the specialty specific indirect PE/HR data, calculate specialty specific aggregate pools of indirect PE for all PFS services for that specialty by adding the product of the indirect PE/HR for the specialty, the work time for the service, and the specialty's utilization for the service across all services furnished by the specialty. Step 14: Using the results of Step 12 as the denominator and Step 13 as the numerator, calculate the specialty specific indirect PE scaling factors. Step 15: Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each specialty specific indirect scaling factor by the average indirect scaling factor for the entire PFS. Step 16: Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service. (Note: For services with TCs and PCs, we calculate the indirect practice cost index across the global service, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC, and global service.) Step 17: Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVUs. (d) Calculate the Final PE RVUs Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs from Step 17 and apply the final PE budget neutrality (BN) adjustment. The final PE BN adjustment is calculated by comparing the sum of steps 5 and 17 to the aggregate work RVUs scaled by the ratio of current aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in the PFS account for the fact that certain specialties are excluded from the calculation of PE RVUs but included in maintaining overall PFS BN. (See ``Specialties excluded from ratesetting calculation'' later in this proposed rule.) Step 19: Apply the phase-in of significant RVU reductions and its associated adjustment. Section 1848(c)(7) of the Act specifies that for services that are not new or revised codes, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased in over a 2-year period. In implementing the phase-in, we consider a 19 percent reduction as the maximum 1-year reduction for any service not described by a new or revised code. This approach limits the year one reduction for the service to the maximum allowed amount (that is, 19 percent), and then phases in the remainder of the reduction. To comply with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure that the total RVUs for all services that are not new or revised codes decrease by no more than 19 percent, and then apply a relativity adjustment to ensure that the total pool of aggregate PE RVUs remains relative to the pool of work and MP RVUs. For a more detailed description of the methodology for the phase-in of significant RVU changes, we refer readers to the CY 2016 PFS final rule with comment period (80 FR 70927 through 70931). (e) Setup File Information Specialties excluded from ratesetting calculation: To calculate the PE and MP RVUs, we exclude certain specialties, such as NPPs paid at a percentage of the PFS and low volume specialties, from the calculation. These specialties are included to calculate the BN adjustment. They are displayed in Table 1. BILLING CODE 4120-01-P [[Page 32358]] [GRAPHIC] [TIFF OMITTED] TP16JY25.005 BILLING CODE 4120-01-C 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 creating the file consistent with the 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 [[Page 32359]] adjustments are applied as well. For time adjustments to surgical services, the intraoperative portion in the work time file is used; where it is not present, the intraoperative percentage from the payment files used by contractors to process Medicare claims is used instead. Where neither is available, we use the payment adjustment ratio to adjust the time accordingly. Table 2 provides details in which the modifiers are applied. [GRAPHIC] [TIFF OMITTED] TP16JY25.006 We also adjust volume and time that correspond to other payment rules, including special multiple procedure endoscopy rules and multiple procedure payment reductions (MPPRs). We note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments for multiple imaging procedures and multiple therapy services from the BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs are not included in the development of the RVUs. Beginning in CY 2022, section 1834(v)(1) of the Act required that we apply a 15 percent payment reduction for outpatient occupational therapy services and outpatient physical therapy services that are provided, in whole or in part, by a physical therapist assistant (PTA) or occupational therapy assistant (OTA). Section 1834(v)(2)(A) of the Act required CMS to establish modifiers to identify these services, which we did in the CY 2019 PFS final rule (83 FR 59654 through 59661), creating the CQ and CO payment modifiers for services provided in whole or in part by PTAs and OTAs, respectively. These payment modifiers are required to be used on claims for services with dates of service beginning January 1, 2020, as specified in the CY 2020 PFS final rule (84 FR 62702 through 62708). We applied the 15 percent payment reduction to therapy services provided by PTAs (using the CQ modifier) or OTAs (using the CO modifier), as required by statute. Under sections 1834(k) and 1848 of the Act, payment is made for outpatient therapy services at 80 percent of the lesser of the actual charge or applicable fee schedule amount (the allowed charge). The remaining 20 percent is the beneficiary copayment. For therapy services to which the new discount applies, payment will be made at 85 percent of the 80 percent of allowed charges. Therefore, the volume discount factor for therapy services to which the CQ and CO modifiers apply is: (0.20 + (0.80 * 0.85), which equals 88 percent. For anesthesia services, we do not apply adjustments to volume since we use the average allowed charge when simulating RVUs; therefore, the RVUs as calculated already reflect the payments as adjusted by modifiers, and no volume adjustments are necessary. However, a time adjustment of 33 percent is made only for medical direction of two to four cases since that is the only situation where a single practitioner is involved with multiple beneficiaries concurrently, so that counting each service without regard to the overlap with other services would overstate the amount of time spent by the practitioner furnishing these services. Work RVUs: The setup file contains the work RVUs from this proposed 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)[supcaret] life of equipment)))) + maintenance) Where: minutes per year = maximum minutes per year if usage were continuous (that is, usage=1); generally, 150,000 minutes. usage = variable, see discussion below in this proposed rule. price = price of the particular piece of equipment. life of equipment = useful life of the particular piece of equipment. maintenance = factor for maintenance; 0.05. interest rate = variable, see discussion below in this proposed 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. [[Page 32360]] Useful Life: In the CY 2005 PFS final rule we stated that we updated the useful life for equipment items primarily based on the AHA's ``Estimated Useful Lives of Depreciable Hospital Assets'' guidelines (69 FR 66246). The most recent edition of these guidelines was published in 2018. This reference material provides an estimated useful life for hundreds of different types of equipment, the vast majority of which fall in the range of 5 to 10 years, and none of which are lower than two years in duration. We believe that the updated editions of this reference material remain the most accurate source for estimating the useful life of depreciable medical equipment. In the CY 2021 PFS final rule, we finalized a proposal to treat equipment life durations of less than 1 year as having a duration of 1 year for the purpose of our equipment price per minute formula. In the rare cases where items are replaced every few months, we noted that we believe it is more accurate to treat these items as disposable supplies with a fractional supply quantity as opposed to equipment items with very short equipment life durations. For a more detailed discussion of the methodology associated with very short equipment life durations, we refer readers to the CY 2021 PFS final rule (85 FR 84482 through 84483). Maintenance: We finalized the 5 percent factor for annual maintenance in the CY 1998 PFS final rule with comment period (62 FR 33164). As we previously stated in the CY 2016 PFS final rule with comment period (80 FR 70897), we do not believe the annual maintenance factor for all equipment is precisely 5 percent, and we concur that the current rate likely understates the true cost of maintaining some equipment. We also noted that we believe it likely overstates the maintenance costs for other equipment. When we solicited comments regarding data sources containing equipment maintenance rates, commenters could not identify an auditable, robust data source that CMS could use on a wide scale. We noted that we did not believe voluntary submissions regarding the maintenance costs of individual equipment items would be an appropriate methodology for determining costs. As a result, in the absence of publicly available datasets regarding equipment maintenance costs or another systematic data collection methodology for determining a different maintenance factor, we did not propose a variable maintenance factor for equipment cost per minute pricing as we did not believe that we have sufficient information at present. We noted that we would continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items. Interest Rate: In the CY 2013 PFS final rule with comment period (77 FR 68902), we updated the interest rates used in developing an equipment cost per minute calculation (see 77 FR 68902 for a thorough discussion of this issue). The interest rate was based on the Small Business Administration (SBA) maximum interest rates for different categories of loan size (equipment cost) and maturity (useful life). The interest rates are listed in Table 3. [GRAPHIC] [TIFF OMITTED] TP16JY25.007 We are not proposing any changes to the equipment interest rates for CY 2026.

3. Adjusting RVUs To Match the PE Share of the Medicare Economic Index

(MEI) In the past, we have stated that we believe that the MEI is the best measure available of the relative weights of the three components in payments under the PFS--work, practice expense (PE), and malpractice (MP). Accordingly, we believe that to ensure that the PFS payments reflect the relative resources in each of these PFS components as required by section 1848(c)(3) of the Act, the RVUs used in developing rates should reflect the same weights in each component as the cost share weights in the Medicare Economic Index (MEI). In the past, we have proposed (and subsequently finalized) to accomplish this by holding the work RVUs constant and adjusting the PE RVUs, MP RVUs, and CF to produce the appropriate balance in RVUs among the three PFS components and payment rates for individual services, that is, that the total RVUs on the PFS are proportioned to approximately 51 percent work RVUs, 45 percent PE RVUs, and 4 percent MP RVUs. As the MEI cost shares are updated, we would typically propose to modify steps 3 and 10 to adjust the aggregate pools of PE costs (direct PE in step 3 and indirect PE in step 10) in proportion to the change in the PE share in the 2017-based MEI cost share weights, and to recalibrate the relativity adjustment that we apply in step 18 as described in the CY 2023 PFS final rule (87 FR 69414 and 69415) and CY 2014 PFS final rule (78 FR 74236 and 74237). The most recent recalibration was done for the CY 2014 RVUs. In the CY 2014 PFS proposed rule (78 FR 43287 through 43288) and final rule (78 FR 74236 through 74237), we detailed the steps necessary to accomplish this result (see steps 3, 10, and 18). The CY 2014 proposed and final adjustments were consistent with our longstanding practice to make adjustments to match the RVUs for the PFS components with the MEI cost share weights for the components, including the adjustments described in the CY 1999 PFS final rule (63 FR 58829), CY 2004 PFS final rule (68 FR 63246 and 63247), and CY 2011 PFS final rule (75 FR 73275). In the CY 2023 PFS final rule (87 FR 69688 through 69711), we finalized to rebase and revise the MEI to reflect more current market conditions faced by physicians in furnishing physicians' services (referred to as the ``2017-based MEI''). We also finalized a delay of the adjustments to the PE pools in steps 3 and 10 and the recalibration of the relativity adjustment in step 18 until the [[Page 32361]] public had an opportunity to comment on the rebased and revised 2017- based MEI (87 FR 69414 through 69416). Because we finalized significant methodological and data source changes to the MEI in the CY 2023 PFS final rule and significant time had elapsed since the last rebasing and revision of the MEI in CY 2014, we believed that delaying the implementation of the finalized 2017-based MEI was consistent with our efforts to balance payment stability and predictability with incorporating new data through more routine updates. We refer readers to the discussion of our comment solicitation in the CY 2023 PFS final rule (87 FR 69429 through 69432), where we reviewed our ongoing efforts to update data inputs for PE to aid stability, transparency, efficiency, and data adequacy. We also solicited comments in the CY 2023 PFS proposed rule on when and how to best incorporate the 2017- based MEI into PFS ratesetting, and whether it would be appropriate to consider a transition to full implementation for potential future rulemaking. We presented the impacts of implementing the 2017-based MEI in PFS ratesetting through a 4-year transition and through full immediate implementation, that is, with no transition period in the CY 2023 PFS proposed rule. We also solicited comments on other implementation strategies for potential future rulemaking in the CY 2023 PFS proposed rule. In the CY 2023 PFS final rule, we discussed that many commenters supported our proposed delayed implementation, and many commenters expressed concerns with the redistributive impacts of the implementation of the 2017-based MEI in PFS ratesetting. Many commenters also noted the AMA's intent to collect practice cost data from physician practices, which could be used to derive cost share weights for the MEI and RVU shares. In CY 2025 PFS rulemaking (89 FR 97722), we stated that in light of the AMA's current data collection efforts and because the methodological and data source changes to the 2017-based MEI finalized in the CY 2023 PFS final rule would have significant impacts on PFS payments, similar to our discussion of this topic in the CY 2024 PFS rulemaking cycle (88 FR 78829 through 78831), we continued to believe that delaying the implementation of the finalized 2017-based MEI cost share weights for the RVUs was consistent with our efforts to balance payment stability and predictability with incorporating new data through more routine updates. For these reasons, we did not propose to incorporate the 2017-based MEI in PFS ratesetting for CY 2024 and CY 2025. As we noted in the CY 2024 PFS final rule, many commenters on the CY 2024 PFS proposed rule supported our continued delayed implementation of the 2017-based MEI in PFS ratesetting (88 FR 78830). Most of these commenters recommended to us to pause consideration of other sources for the MEI until the AMA's efforts to collect practice cost data from physician practices concluded, although a few commenters recommended that we implement the MEI for PFS ratesetting as soon as possible. We stated that we agree with the commenters that it would be prudent, and avoid potential duplication of effort, to wait to consider other data sources for the MEI while the AMA's data collection activities were ongoing. We stated that as we discussed in the CY 2024 PFS final rule, we continue to monitor the data available related to physician services' input expenses, but we were not proposing to update the data underlying the MEI cost weights at that time. At the time of publication of this proposed rule, the AMA has concluded their data collection efforts and, in early 2025, submitted data from its Physician Practice Information (PPI) and Clinician Practice Information (CPI) Surveys to CMS for us to consider implementing the PE/HR data and cost shares in PFS ratesetting for CY 2026. We appreciate the AMA's data collection efforts, and recognize the significant efforts required to develop the survey and collect the data. We have prioritized review of the submitted information during the first part of this year based on our longstanding interest in the value of updated practice expense information. At this time, however, we have substantive concerns about the accuracy and suitability of the PPI and CPI Survey data as an immediate replacement for the current PE/ HR data and cost shares for use in CY 2026 PFS ratesetting. Due to overarching concerns with the data as described below and our previously described policy goal to balance PFS payment stability and predictability with incorporating new data through routine updates to the MEI, we are not proposing to implement the PE/HR or cost shares from the AMA's survey data at this time. Instead, we propose to maintain the current PE/HR and 2006-based MEI cost shares for CY 2026 PFS ratesetting.

4. Changes to Direct PE Inputs for Specific Services

This section focuses on specific PE inputs. The direct PE inputs are included in the CY 2026 direct PE input public use files, which are available on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-fafor-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 through 67641), we continue to make improvements to the direct PE input database to provide the number of clinical labor minutes assigned for each task for every code in the database instead of only including the number of clinical labor minutes for the preservice, service, and post service periods for each code. In addition to increasing the transparency of the information used to set PE RVUs, this level of detail would allow us to compare clinical labor times for activities associated with services across the PFS, which we believe is important to maintaining the relativity of the direct PE inputs. This information would facilitate the identification of the usual numbers of minutes for clinical labor tasks and the identification of exceptions to the usual values. It would also allow for greater transparency and consistency in the assignment of equipment minutes based on clinical labor times. Finally, we believe that the detailed information can be useful in maintaining standard times for particular clinical labor tasks that can be applied consistently to many codes as they are valued over several years, similar in principle to 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 the relativity of values among codes. For example, as medical practice and technologies change over time, 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, [[Page 32362]] order from physician confirmed and exam protocoled by radiologist'', 2 minutes for ``Review examination with interpreting MD'', and 1 minute for ``Exam documents scanned into PACS'' and ``Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue.'' In the CY 2017 PFS final rule (81 FR 80184 through 80186), we finalized a policy to establish a range of appropriate standard minutes for the clinical labor activity, ``Technologist QCs images in PACS, checking for all images, reformats, and dose page.'' These standard minutes will be applied to new and revised codes that make use of this clinical labor activity when they are reviewed by us for valuation. We finalized a policy to establish 2 minutes as the standard for the simple case, 3 minutes as the standard for the intermediate case, 4 minutes as the standard for the complex case, and 5 minutes as the standard for the highly complex case. These values were based upon a review of the existing minutes assigned for this clinical labor activity; we determined that 2 minutes is the duration for most services and a small number of codes with more complex forms of digital imaging have higher values. We also finalized standard times for a series of clinical labor tasks associated with pathology services in the CY 2016 PFS final rule with comment period (80 FR 70902). We do not believe these activities would be dependent on number of blocks or batch size, and we believe that the finalized standard values accurately reflect the typical time it takes to perform these clinical labor tasks. In reviewing the RUC-recommended direct PE inputs for CY 2019, we noticed that the 3 minutes of clinical labor time traditionally assigned to the ``Prepare room, equipment and supplies'' (CA013) clinical labor activity were split into 2 minutes for the ``Prepare room, equipment and supplies'' activity and 1 minute for the ``Confirm order, protocol exam'' (CA014) activity. We proposed to maintain the 3 minutes of clinical labor time for the ``Prepare room, equipment and supplies'' activity and remove the clinical labor time for the ``Confirm order, protocol exam'' activity wherever we observed this pattern in the RUC-recommended direct PE inputs. Commenters explained in response that when the new version of the PE worksheet introduced the activity codes for clinical labor, there was a need to translate old clinical labor tasks into the new activity codes, and that a prior clinical labor task was split into two of the new clinical labor activity codes: CA007 (Review patient clinical extant information and questionnaire) in the preservice period, and CA014 (Confirm order, protocol exam) in the service period. Commenters stated that the same clinical labor from the old PE worksheet was now divided into the CA007 and CA014 activity codes, with a standard of 1 minute for each activity. We agreed with commenters that we would finalize the RUC- recommended 2 minutes of clinical labor time for the CA007 activity code and 1 minute for the CA014 activity code in situations where this was the case. However, when reviewing the clinical labor for the reviewed codes affected by this issue, we found that several of the codes did not include this old clinical labor task, and we also noted that several of the reviewed codes that contained the CA014 clinical labor activity code did not contain any clinical labor for the CA007 activity. In these situations, we believe that the three 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. We direct readers to the discussion in the CY 2019 PFS final rule (83 FR 59463 through 59464) for additional details. Following the publication of the CY 2020 PFS proposed rule, one commenter expressed concern with the published list of common refinements to equipment time. The commenter stated that these refinements were the formulaic result of applying refinements to the clinical labor time and did not constitute separate refinements; the commenter requested that CMS no longer include these refinements in the table published each year. In the CY 2020 PFS final rule, we agreed with the commenter that these equipment time refinements did not reflect errors in the equipment recommendations or policy discrepancies with the RUC's equipment time recommendations. However, we believed it was important to publish the specific equipment times that we were proposing (or finalizing in the case of the final rule) when they differed from the recommended values due to the effect these changes can have on the direct costs associated with equipment time. Therefore, we finalized the separation of the equipment time refinements associated with changes in clinical labor into a separate table of refinements. We direct readers to the discussion in the CY 2020 PFS final rule (84 FR 62584) for additional details. Historically, the RUC has submitted a ``PE worksheet'' that details the recommended direct PE inputs for our use in developing PE RVUs. The format of the PE worksheet has varied over time, and among the medical specialties developing the recommendations. These variations have made it difficult for the RUC's development and our review of code values for individual codes. Beginning with its recommendations for CY 2019, the RUC mandated the use of a new PE worksheet for its 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 helps us simplify and standardize the hundreds of clinical labor tasks currently listed in our direct PE database. As in previous calendar years, to facilitate rulemaking for CY 2026, 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 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. b. 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. Beginning in CY 2019 and continuing through CY 2022, we conducted a market-based supply and equipment pricing update using information developed by our contractor, StrategyGen, which updated pricing recommendations for approximately 1,300 supplies and 750 equipment items currently used as direct PE inputs. Given the potentially significant changes in payment that would occur, in the CY 2019 PFS final rule, we finalized a policy to phase in our use of the new direct PE input pricing over a 4-year period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25 percent (CY 2021), and 100/0 percent (CY 2022) split between new and old pricing. We believed that implementing the proposed updated prices with a 4-year phase-in would improve payment accuracy while maintaining stability and allowing interested parties to address potential [[Page 32363]] concerns about changes in payment for particular items. This 4-year transition period to update supply and equipment pricing concluded in CY 2022; for a more detailed discussion, we refer readers to the CY 2019 PFS final rule with comment period (83 FR 59473 through 59480). For CY 2026, we are proposing to update the price of 35 supplies and seven equipment items in response to the public submission of invoices following the publication of the CY 2025 PFS final rule. The 42 supply and equipment items with proposed updated prices are listed in the valuation of specific codes section of the preamble under Table 6, CY 2026 Invoices Received for Existing Direct PE Inputs. We received a series of invoices associated with the SD339 supply prior to our February 10th submission deadline and are proposing to update its pricing accordingly for CY 2026, as detailed in Table 6, CY 2026 Invoices Received for Existing Direct PE Inputs. We later received additional invoices associated with this supply several months following our February 10th deadline which arrived too late to be included in the proposed updated pricing for this supply as shown in Table 6. Consistent with our previously finalized policy associated with the February 10th deadline (79 FR 67608), we will review these invoices during the comment period following the publication of this CY 2026 PFS proposed rule for potential inclusion in the final rule. We are not proposing to update the price of another eight supplies and one equipment item, which were the subject of public submission of invoices. Our reasons for not proposing updates to these prices are detailed below, and we are soliciting additional information from interested parties for assistance in pricing these supplies: Radiation treatment vault (ER056): We received pricing information associated with the radiation treatment vault from an interested party. However, this pricing information contained numerous costs associated with building construction which would not be included on a traditional invoice, such as surveying, plumbing and HVAC expenses, drywall packaging, and the installation of electrical equipment. As we previously stated in the CY 2021 PFS final rule about similar costs associated with proton beam treatment delivery services, the expenses associated with constructing new office facilities fall outside of our direct PE methodology and would be more accurately classified as a form of building maintenance or office rent under indirect PE (85 FR 84626). We do not agree that construction costs should be included as a form of direct PE because they are not individually allocable to a particular patient for a particular service. Therefore, we do not believe that it would serve the interests of relativity to include these building construction costs for the radiation treatment vault as a type of direct PE expense. In the absence of other pricing information associated with the radiation treatment vault, or pricing of the vault absent these building construction costs, we are proposing to maintain its current price of $773,104. Congo red kits (SA110) and UltraView Universal DAB Detection Kit (SL488): We received three invoices from interested parties requesting an increase in the price of the SA110 supply from $6.80 to $20.12 and another three invoices from interested parties requesting an increase in the price of the SL488 equipment from $12.28 to $41.26. In both cases, we do not understand how the typical price of these supplies could be increasing by such a large amount, tripling the current price in both cases, given that the price of both supplies was recently updated. Both the SA110 supply and the SL488 supply had their prices updated in the CY 2024 PFS final rule, with the SA110 supply increasing from $6.16 to $6.80 and the SL488 supply increasing from $9.70 to $12.28 (88 FR 78966 through 78967). We do not believe that the typical price for these supplies would increase to such a great degree given that their pricing was already recently updated for CY 2024; therefore, we are not proposing to update. Catheter, balloon, rectal pressure (SD017); catheter, pressure, urodynamic (SD027); and transducer dome (pressure) (SD125): We received one invoice from interested parties for each of these three supplies. Interested parties requested an increase in the price of the SD017 supply from $35.89 to $74.00, an increase in the price of the SD027 supply from $19.35 to $86.80, and an increase in the price of the SD125 supply from $3.58 to 17.32. However, in each of these three cases, it was unclear if the item on the invoice matched the supply item in question. The invoice for the SD017 supply listed a ``Abdominal Sensor Catheter'', the invoice for the SD027 supply listed a ``Single Sensor Catheter'', and the invoice for the SD125 supply listed a ``transducer cartridge with luer lock''. Given the differences between the names of the items in question, and the significant increases in requested pricing, we are not proposing to update the pricing of these three supplies as we cannot verify that the invoices refer to the same supply items. Electrode, surface (SD062): We received one invoice from interested parties requesting a decrease in the price of the SD062 supply from $1.58 to $0.34. The invoice appeared to state that there are 10 copies of 10 packs of 3 electrodes which, when dividing the total price of $103 by 300 electrodes, results in a price of $0.34 per electrode. We do not believe that the interested parties intended to submit an invoice resulting in a 78 percent decrease in pricing for the SD062 supply, and we are not convinced that we have correctly understood the unit quantity for this item. As a result, we are not proposing to change the pricing of the SD062 supply at this time. Biohazard specimen transport bag (SM008): We received one invoice from interested parties requesting an increase in the price of the SM008 supply from $0.087 to $0.750, an increase of more than 750 percent. However, when we reviewed the invoice, we determined that it referred to a different type of disposal bag than the biohazard specimen transport bag described by the SM008 supply, which explained the disparity in the pricing. We are therefore not proposing to update the pricing of the SM008 supply. Wipes, lens cleaning (per wipe) (Kimwipe) (SM027): We received one invoice from interested parties requesting an increase in the price of the SM027 supply from $0.04 to $0.33, an increase of approximately 700 percent. However, when we reviewed the supply in question, we found that lens cleaning wipes were readily available for purchase at the current price of $0.04 per wipe. We are therefore not proposing to update the pricing of the SM027 supply. (1) Invoice Submission We remind readers that we routinely accept public submissions of invoices as part of our process for developing payment rates for new, revised, and potentially misvalued codes. Often, these invoices are submitted in conjunction with the RUC-recommended values for the codes. To be included in a given year's proposed rule, we generally need to receive invoices by the same February 10th deadline we noted for consideration of RUC recommendations. However, we will consider invoices submitted as public comments during the comment period following the publication of the PFS proposed rule and will consider any invoices received after February 10th or outside of the public comment [[Page 32364]] process as part of our established annual process for requests to update supply and equipment prices. Interested parties are encouraged to submit invoices with their public comments or, if outside the notice and comment rulemaking process, via email at [email protected]. (2) Supply Pack Pricing Update Interested parties previously notified CMS that they identified numerous discrepancies between the aggregated cost of some supply packs and the individual item components contained within. The interested parties indicated that CMS should rectify these mathematical errors as soon as possible to ensure that the sum correctly matches the totals from the individual items, and they recommended that we resolve these pricing discrepancies in the supply packs during CY 2024 rulemaking. The AMA RUC convened a workgroup on this subject and submitted recommendations to update pricing for a series of supply packs along with the RUC's comment letter for the CY 2024 rule cycle. We appreciated the additional information and RUC workgroup recommendations regarding discrepancies in the aggregated cost of some supply packs. However, due to the projected significant cost revisions in the pricing of supply packs and because we did not propose to address supply pack pricing in the CY 2024 proposed rule, we stated in the CY 2024 final rule that this issue would be better addressed in future rulemaking. For example, the cleaning and disinfecting endoscope pack (SA042) is included as a supply input in more than 300 HCPCS codes, which could have a sizable impact on the overall valuation of these services, and which was not incorporated into the proposed RVUs published for the CY 2024 proposed rule. We stated that interested parties would be better served if we comprehensively addressed this topic during future rulemaking in which commenters could provide feedback in response to proposed pricing updates (88 FR 78833 through 78834). For CY 2025, we proposed to implement the supply pack pricing update and associated revisions as recommended by the RUC's workgroup (89 FR 97726 through 97727). We proposed to update the pricing of the ``pack, cleaning and disinfecting, endoscope'' (SA042) supply from $19.43 to $31.29, to update the pricing of the ``pack, drapes, cystoscopy'' (SA045) supply from $17.33 to $14.99, to update the pricing of the ``pack, ocular photodynamic therapy'' (SA049) supply from $16.35 to $26.35, to update the pricing of the ``pack, urology cystoscopy visit'' (SA058) supply from $113.70 to $37.63, and to update the pricing of the ``pack, ophthalmology visit (w-dilation)'' (SA082) supply from $3.91 to $2.33. As recommended by the RUC workgroup, we also proposed to delete the ``pack, drapes, laparotomy (chest- abdomen)'' (SA046) supply entirely. The updated prices for these supply packs were listed in the valuation of specific codes section of the preamble under Table 6, CY 2025 Invoices Received for Existing Direct PE Inputs (89 FR 97852). In accordance with the RUC workgroup's recommendations, we also proposed to create 8 new supply codes, including components contained within previously existing supply packs. Aside from the SB056 supply, which is a replacement in several HCPCS codes for the deleted SA046 supply pack, all of these new supplies are not included as standalone direct PE inputs in any current HCPCS codes, as they are, again, components contained within previously existing supply packs. We proposed to add: The kit, ocular photodynamic therapy (PDT) (SA137) supply at a price of $26.00 as a component of the SA049 supply pack; The Abdominal Drape Laparotomy Drape Sterile (100 in x 72 in x 124 in) (SB056) supply at a price of $8.049 as a replacement for the SA046 supply pack; The drape, surgical, legging (SB057) supply at a price of $3.284 as a component of the SA045 supply pack; The drape, surgical, split, impervious, absorbent (SB058) supply at a price of $8.424 as a component of the SA045 supply pack; The post-mydriatic spectacles (SB059) supply at a price of $0.328 as a component of the SA082 supply pack; The y-adapter cap (SD367) supply at a price of $0.352 as a component of the SA049 supply pack; The ortho-phthalaldehyde 0.55 percent (for example, Cidex OPA) (SM030) supply at a price of $0.554 as a component of the SA042 supply pack; and The ortho-phthalaldehyde test strips (SM031) supply at a price of $1.556 as a component of the SA042 supply pack. The new supply pack component items were listed in the valuation of specific codes section of the preamble under Table 8, CY 2025 New Invoices (89 FR 97853). We also proposed the following additional supply substitutions based on the recommendations of the RUC workgroup. We proposed to remove the deleted SA046 supply pack and replace it with the drape, sterile, fenestrated 16in x 29in (SB011) supply for CPT codes 19020, 19101, 19110, 19112, 20101, and 20102. We proposed to remove the deleted SA046 supply pack and replace it with two supplies--the drape, sterile, three-quarter sheet (SB014) and the drape, towel, sterile 18in x 26in (SB019)--for CPT codes 19000 and 60300. We proposed to remove the deleted SA046 supply pack and replace it with 2 supplies--the drape, towel, sterile 18in x 26in (SB019) and the newly created Abdominal Drape Laparotomy Drape Sterile (100 in x 72 in x 124 in) (SB056) supply--for CPT codes 22510, 22511, 22513, and 22514. We proposed to remove the deleted SA046 supply pack without replacing it with anything for CPT code 22526; the RUC workgroup did not make a recommendation on what to do with CPT code 27278, which also previously contained the SA046 supply pack. Therefore, we also proposed not to replace the SA046 supply pack with any supplies for this code. The RUC workgroup also recommended removing the SA046 supply pack from CPT code 64595 with no replacement; however, this code was recently reviewed at the April 2022 RUC meeting and it no longer includes the SA046 supply. In the comments on the CY 2025 PFS proposed rule (89 FR 97727 through 97729), several commenters supported the proposed supply pack pricing update as recommended by the RUC workgroup, however they indicated concern over the proposed decrease in the price of the urology cystoscopy visit pack (SA058) from $113.70 to $37.63. Commenters stated that the proposed pricing reduction in the SA058 supply could result in drastic payment rate cuts for physicians performing cystoscopy services in the office setting. Commenters requested that CMS either delay the pricing update or phase-in the supply pack changes over a four-year period like it has done for other PE changes with significant redistributive effects, allowing independent urology practices to better prepare for the negative financial impact this change will have. [[Page 32365]] After considering these comments, we agreed that the use of a phased-in transition period would be appropriate to allow practitioners to adjust to the updated pricing of these supplies. During our previous supply and equipment pricing update in the CY 2019 PFS final rule, we finalized a policy to phase in any updated pricing that we established during the 4-year transition period for very commonly used supplies and equipment, such as sterile gloves (SB024) or exam tables (EF023), even if invoices were provided as part of the formal review of a code family (83 FR 59475). Based on this previously established policy, we finalized the use of a pricing transition for three supply packs in Table 4: [GRAPHIC] [TIFF OMITTED] TP16JY25.008 Following the same pattern as our previous supply/equipment and clinical labor pricing updates, we finalized the implementation of this pricing transition over 4 years such that one-quarter of the difference between the current price and the fully phased-in price is implemented for CY 2025, one-third of the difference between the CY 2025 price and the final price is implemented for CY 2026, and one-half of the difference between the CY 2026 price and the final price is implemented for CY 2027, with the new direct PE prices fully implemented for CY 2028. For the other proposed supply packs, the cystoscopy drapes pack (SA045) is only included in 7 HCPCS codes and the ocular photodynamic therapy pack (SA049) is only included in a single HCPCS code which do not meet these criteria established in previous rulemaking and described above. We therefore finalized each of them at their updated pricing for CY 2025 as proposed in the proposed rule. We believe that the use of this pricing transition will minimize any potential disruptive effects during the 4-year 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 packs. Several commenters also stated that although five incomplete packs would have their pricing updated in the proposed rule, mathematical errors still remained for a number of additional supply packs. Commenters stated that only 3 of the 18 affirmed packs were priced correctly to match their components and provided tables showing the pricing of an additional 15 packs that needed mathematical correction by deconstructing the packs to determine the correct price through summing their individual components. Commenters requested that CMS initiate a correction of the packs pricing such that the sum of the individual components match the price of the corresponding pack as detailed in Table 5: [GRAPHIC] [TIFF OMITTED] TP16JY25.009 While we shared the concerns of the commenters regarding the need for accuracy in the pricing of these supply packs, we had reservations about their potential for pricing disruptions. Ten of these supply packs are included in the direct PE inputs for at least 100 HCPCS codes, and three of the packs are included in more than 1000 HCPCS codes. Many of these pricing updates would lead to drastic changes in pricing for these supply packs which are [[Page 32366]] included in hundreds of HCPCS codes, such as the SA051 pelvic exam pack decreasing in price from $20.16 to $2.81 (-86 percent) and the SA048 minimum multi-specialty visit pack decreasing in price from $5.02 to $1.98 (-61 percent). We were particularly concerned that these changes in supply pack pricing could lead to significant shifts in the overall PE RVU for affected HCPCS codes, without these proposed rates appearing in the proposed rule or allowing any opportunity for public comment. Therefore, we did not finalize pricing updates for these additional 15 supply packs as requested by commenters. We anticipated returning to this subject in future rulemaking to allow any changes in associated pricing for HCPCS codes to appear in the proposed rule and provide an opportunity for the public to comment. Should these supply pack pricing updates be proposed in future rulemaking, we anticipated that we might propose the same pricing transition described above due to the number of potentially affected HCPCS codes. We finalized all of the other supply pack pricing changes as proposed, with the exception of the 4[dash]year pricing transition for three supply packs as described above. For CY 2026, we are proposing to continue implementing the supply pack pricing update and associated revisions as previously recommended by the RUC's workgroup. We are proposing to update the price of the 15 supply packs detailed in Table 5 which were received too late in CY 2025 to allow for proposed pricing or public comment. In the case of the surgical instruments cleaning pack (SA043), the moderate sedation pack (SA044) and the small ortho drapes pack (SA081), the proposed pricing update is modest enough that we are proposing these supplies move immediately to their final prices for CY 2026. For the 12 other supply packs, we are proposing that they be incorporated into the muti-year supply pack pricing transition finalized in CY 2025 rulemaking. Rather than having two separate 4-year pricing transitions associated with supply packs, we are proposing that these 12 additional supply packs fold into the previous pricing transition using the same methodology, such that one-third of the difference between the CY 2025 price and the final price is implemented for CY 2026, and one-half of the difference between the CY 2026 price and the final price is implemented for CY 2027, with the new direct PE prices fully implemented for CY 2028 (89 FR 97728). With the inclusion of the SA042, SA058, and SA082 supply packs which began their pricing transition last year for CY 2025, we are proposing the total supply pack pricing update detailed in Table 6: [GRAPHIC] [TIFF OMITTED] TP16JY25.010 This table also includes the hydrophilic guidewire (SD089) supply which we are proposing to transition in pricing over three years given its inclusion in approximately 100 HCPCS codes. We continue to believe that the use of this pricing transition will minimize any potential disruptive effects during the 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 items. c. Technical Corrections To Direct PE Input Database and Supporting Files Following the publication of the CY 2025 PFS final rule, we received a request from the RUC to remove all equipment items priced below $500 from the CMS ratesetting database. The RUC stated that since CMS has defined that medical equipment must be at least $500 and all equipment inputs under $500 are considered indirect expense, the 11 current equipment items under this threshold should no longer be listed as equipment. The RUC requested that CMS remove these items from its equipment list and from the specific HCPCS codes to conform to the definition of direct medical equipment and to ensure that the rule remains consistently applied. We appreciate the RUC bringing this topic to our attention. However, we are not proposing to remove these 11 equipment items that fall under the $500 threshold from the CMS ratesetting database. These equipment items have historically been included as direct PE inputs in their respective HCPCS codes for the last two decades and, given the very small valuation associated with their use (such as the ED004 digital [[Page 32367]] camera priced at approximately 0.06 cents per minute of use), we do not believe that it is necessary to remove them from the database. We believe that it better serves relativity by continuing to maintain these equipment items due to their historical inclusion in their associated HCPCS codes, as opposed to the removal of long-standing direct PE inputs which may cause unnecessary confusion and lead to concern that the valuation of these services would be negatively impacted. We are soliciting comments on whether to maintain or remove these equipment items. We also received a request from the RUC to update the names of several supplies and equipment items in the CMS ratesetting database. The RUC stated that these naming changes would remove specific product or brand names and more accurately describe the items in question. We agree with the RUC and we are proposing naming changes for the following supplies and equipment items: EQ392: We are proposing to rename the ``heart failure patient physiologic monitoring equipment package'' to ``patient physiologic monitoring equipment package''. ER089: We are proposing to rename the ``IMRT Accelerator'' to ``Radiation Treatment Delivery Linear Accelerator''. SD253: We are proposing to rename the ``atherectomy device (Spectronetics laser or Fox Hollow)'' supply to ``atherectomy device''. SD254: We are proposing to rename the ``covered stent (VIABAHN, Gore)'' to ``covered stent (VIABAHN)''. We received a separate request from the RUC for a technical correction involving CPT code 65780 (Ocular surface reconstruction; amniotic membrane transplantation, multiple layers). The RUC stated that there was a potential issue with the intraservice work time for CPT code 65780, which was recommended by the RUC with 35 minutes of work time and finalized by CMS with no work time refinements. However, CPT code 65780 was listed with 25 minutes of intraservice work time in the work time public use file issued with the CY 2025 PFS final rule; the RUC questioned whether this was a potential technical error. We have reviewed CPT code 65780 and concluded that the intraservice work time was unintentionally listed with the incorrect work time of 25 minutes; we are proposing to correct this to the intended work time of 35 minutes. We note that the total work time of 192 minutes was listed correctly for CPT code 65780 and does not require a technical correction. We also received a request from the RUC for a technical correction involving CPT code 15851 (Removal of sutures or staples requiring anesthesia (that is, general anesthesia, moderate sedation)). The RUC stated that CPT code 15851 continued to receive PE RVUs in the nonfacility setting despite no longer having any direct PE inputs following its review at the January 2022 RUC meeting. Since CMS finalized the RUC's recommended lack of direct PE inputs for CPT code 15851 in the CY 2023 PFS final rule, the RUC questioned whether this was a potential technical error. We have reviewed CPT code 15851 and concluded that the continued assignment of PE RVUs in the nonfacility setting is an unintended technical error; we are proposing to correct this code by removing the nonfacility PE RVUs for CY 2026.

5. Development of Strategies for Updates to Practice Expense Data

Collection and Methodology a. Background The AMA PPIS was first introduced in 2007 as a means to collect comprehensive and reliable data on the direct and indirect PEs incurred by physicians (72 FR 66222). In considering the use of PPIS data, the goal was to improve the accuracy and consistency of PE RVUs used in the PFS. The data collection process included a stratified random sample of physicians across various specialties, and the survey was administered between August 2007 and March 2008. Data points from that period of time are integrated into PFS calculations today. In the CY 2009 PFS proposed rule (73 FR 38507 through 3850), we discussed the indirect PE methodology that used data from the AMA's survey that predated the PPIS. In CY 2010 PFS rulemaking, we announced our intent to incorporate the AMA PPIS data into the PFS ratesetting process, which would first affect the PE RVU. In the CY 2010 PFS proposed rule, we outlined a 4- year transition period, during which we would phase in the AMA PPIS data, replacing the existing PE data sources (74 FR 33554). We also explained that our proposals intended to update survey data only (74 FR 33530 through 33531). In our CY 2010 final rule, we finalized our proposal, with minor adjustments based on public comments (74 FR 61749 through 61750). We responded to the comments we received about the transition to using the PPIS to inform indirect PE allocations (74 FR 61750). In the responses, we acknowledged concerns about potential gaps in the data, which could impact the allocation of indirect PE for certain physician specialties and suppliers, which are issues that remain important today. The CY 2010 PFS final rule explains that section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 106- 113, November 29, 1999) (BBRA) directed 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. BBRA required us to establish criteria for accepting supplemental survey data. Since the supplemental surveys were specific to individual specialties and not part of a comprehensive multispecialty survey, we had required that certain precision levels be met in order to ensure that the supplemental data was sufficiently valid, and acceptable for use in the development of the PE RVUs. At the time, our rationale included the assumption that because the PPIS is a contemporaneous, consistently collected, and comprehensive multispecialty survey, we do not believe similar precision requirements are necessary, and we did not propose to establish them for the use of the PPIS data (74 FR 61742). We noted potential gaps in the data, which could impact the allocation of indirect PE for certain physician and suppliers. The CY 2010 final rule adopted the proposal, with minor adjustments based on public comments, and explained that these minor adjustments were in part due to non- response bias that results when the characteristics of survey respondents differ in meaningful ways, such as in the mix of practices sizes, from the general population (74 FR 61749 through 61750). Throughout the 4-year transition period, from CY 2010 to CY 2013, we gradually incorporated the AMA PPIS data into the PFS rates, replacing the previous data sources. The process involved addressing concerns and making adjustments as necessary, such as refining the PFS ratesetting methodology in consideration of interested party feedback. For background on the refinements that we considered after the transition began, we refer readers to discussions in the CY 2011 through 2014 final rules (75 FR 73178 through 73179; 76 FR 73033 through 73034; 77 FR 98892; 78 FR 74272 through 74276). In the CY 2011 PFS proposed rule, we requested comments on the methodology for calculating indirect PE RVUs, explicitly seeking input on using survey data, allocation methods, and [[Page 32368]] potential improvements (75 FR 40050). In our CY 2011 PFS final rule, we addressed comments regarding the methodology for indirect PE calculations, focusing on using survey data, allocation methods, and potential improvements (75 FR 73178 through 73179). We recognized some limitations of the current PFS ratesetting methodology but maintained that the approach was the most appropriate at the time. In the CY 2012 PFS final rule, we responded to comments related to indirect PE methodology, including concerns about allocating indirect PE to specific services and using the AMA PPIS data for certain specialties (76 FR 73033 through 73034). We indicated that CMS would continue to review and refine the methodology and work with interested parties to address their concerns. In the CY PFS 2014 final rule, we responded to comments about fully implementing the AMA PPIS data. By 2014, the AMA PPIS data had been fully integrated into the PFS, serving as the primary source for determining indirect PE inputs (78 FR 74235). We continued to review data and the PE methodology annually, considering interested party feedback and evaluating the need for updates or refinements to ensure the accuracy and relevance of PE RVUs (79 FR 67548). In the years following the full implementation of the AMA PPIS data, we further engaged with interested parties, thought leaders and subject matter experts to improve our PE inputs' accuracy and reliability. For further background, we refer readers to our discussions in final rules for CY 2016 through 2022 (80 FR 70892; 81 FR 80175; 82 FR 52980 through 52981; 83 FR 59455 through 59456; 84 FR 62572; 85 FR 84476 through 84478; 86 FR 62572). In our CY 2023 PFS final rule, we issued an RFI to solicit public comment on strategies to update PE data collection and methodology (87 FR 69429 through 69432). We solicited comments on current and evolving trends in health care business arrangements, the use of technology, or similar topics that may affect or factor into PE calculations. As described in previous rulemaking, we have continued interest in developing a roadmap for updates to our PE methodology that account for changes in the health care landscape. Of various considerations necessary to form a roadmap for updates, we reiterate that allocations of indirect PE continue to present a wide range of challenges and opportunities. As discussed in multiple cycles of previous rulemaking, our PE methodology currently relies on AMA PPIS data, which we have maintained represented the best aggregated available source of information at the time of its implementation. We noted in our CY 2023 and CY 2024 rules that there are several competing concerns that CMS must take into account when considering updated data sources, which also should support and enable ongoing refinements to our PE methodology. b. Refreshed Data and Request for Information on Timing To Effectuate Routine Updates In the CY 2024 PFS proposed rule, we continued to encourage interested parties to provide feedback and suggestions to CMS that give an evidentiary basis to shape optimal PE data collection and methodological adjustments over time. Considering our ratesetting methodology and prior experiences implementing new data, we issued a follow-up from the CY 2023 comment solicitation for general information. We solicited comments from interested parties on strategies to incorporate information that could address known challenges we experienced in implementing the initial AMA PPIS data. Our current methodology relies on the AMA PPIS data, legislatively mandated supplemental data sources (for, example, we use supplemental survey data collected in 2003, as required by section 1848(c)(2)(H)(i) of the Act to set rates for oncology and hematology specialties), and in some cases crosswalks to allocate indirect PE as necessary for certain specialties and practitioner types. We also sought to understand whether, upon completion of the updated PPIS data collection effort by the AMA, contingencies or alternatives may be necessary and available to address the lack of data availability or response rates for a given specialty, set of specialties, or specific service suppliers who are paid under the PFS. In response to the CY 2024 RFI, most commenters stated that CMS should defer significant changes until the AMA PPIS results become available. For further background, refer to 88 FR 78841 through 78843. In responding to our RFI, the AMA RUC provided a set of responses, which many other commenters echoed in separate comments. In summary, the AMA RUC letter submission from CY 2024 suggested that CMS should not consider further changes until PPIS data collection and analysis is complete. Overall, the AMA comments generally do not support any change to the methodology and stated that CMS should wait to consider any further changes until PPIS updates become available. Further, we noted that through its contractor, Mathematica, the AMA secured an endorsement for the PPIS updates from each State society, national medical specialty society, and others prior to fielding the survey (88 FR 78843). Refer to the AMA's summary of the PPIS, available at https://www.ama-assn.org/system/files/physician-practice-information-survey-summary.pdf. The AMA stated that it expects analysis, reporting, and documentation to be completed by the end of CY 2024 and would share data with CMS when results become available. Some commenters did not recommend that CMS defer significant changes until the AMA PPIS results become available. These commenters stated that reliance on the PPIS updates may not improve the accuracy and stability of the PE methodology because of the survey design, possible implementation challenges, and a possible lack of transparency or granularity in resulting datasets. Other commenters stated that dependence on the PPIS or survey data in general, due to timing and frequency constraints, may continue to jeopardize independent practice and discourage fair competition among suppliers and providers of services paid under the PFS. These commenters assert that if current trends continue, it will result in far fewer independent practices and more consolidation before the availability of updated survey data, undermining the sampling methodology of any survey and the general goals of our PE methodology updates. As we stated in the CY 2025 proposed rule (89 FR 61614), we believe the AMA's approach may possibly mitigate nonresponse bias, which created challenges using previous PPIS data. However, we remain uncertain about whether endorsements prior to fielding the survey may inject other types of bias in the validity and reliability of the information collected. We believe it remains important to reflect on the challenges with our current methodology, and to continue to consider alternatives that improve the stability and accuracy of our overall PE methodology. We reiterate our discussion summarizing the responses to previous years' RFIs in each of the CY 2023 and CY 2024 final rules (refer to 87 FR 69429 through 69432 and 88 FR 78841 to 78843). We also requested general information from the public on ways that CMS may continue work to improve the stability and predictability of any future updates. Specifically, we [[Page 32369]] requested feedback from interested parties regarding scheduled, recurring updates to PE inputs for supply and equipment costs. We stated that we believe that establishing a cycle of timing to update supply and equipment cost inputs every 4 years may be one means of advancing shared goals of stability and predictability. CMS would collect available data, including, but not limited to, submissions and independent third-party data sources, and propose a phase-in period over the following 4 years. The phase-in approach maps to our experience with previous updates. Additionally, we stated that more frequent updates may have the unintended consequence of disproportionate effects of various supplies and equipment that have newly updated costs. Further, we solicited feedback in the CY 2025 proposed rule RFI (89 FR 61614) on possible mechanisms to establish a balance whereby our methodology would account for inflation and deflation in supply and equipment costs. We stated that we remain uncertain how economies of scale (meaning a general principle that cost per unit of production decreases as the scale of production increases) should or should not factor into future adjustments to our methodology. We stated that there remains a diversity of perspectives among interested parties about such effects. We sought information about specific mechanisms that may be appropriate, and in particular, approaches that would leverage verifiable and independent third-party data that is not managed or controlled by active market participants. In response to our CY 2025 proposed rule RFI (89 FR 97737), numerous commenters expressed concerns regarding CMS's current PE methodology, particularly highlighting its perceived inadequacies in accommodating modern medical technologies and services, such as Software as a Service (SaaS) and artificial intelligence (AI). These commenters stated that there is a need for CMS to revise its PE methodology to better reflect the actual costs of running medical practices today, which includes more frequent updates and the incorporation of direct costs for software and innovative technologies. Many also supported the AMA's PPIS efforts to ensure updated and accurate data informs PE calculations. Commenters urged CMS to collaborate closely with medical associations and incorporate broad stakeholder feedback without increasing reporting burdens, particularly for smaller practices. We note that we have an ongoing contract with the RAND Corporation to analyze and develop alternative methods for measuring PE and related inputs for implementation of updates to payment under the PFS. We will continue to study possible alternatives and have included analysis of the updated PPI and CPI Survey data in this proposed rule, as part of our ongoing work. As previously stated above and discussed in sections II.N. and VI. of this proposed rule, we acknowledge that, at the time of publication of this proposed rule, the AMA concluded their data collection efforts and has submitted the data to CMS for us to consider implementing the PE/HR data and cost shares in PFS ratesetting for CY 2026. In the current system, accurate measurement of the indirect to direct PE ratio and the PE/HR for each specialty is critical to ensure that allocated indirect PE RVUs (and therefore total PE RVUs) accurately estimate service-level PE as defined by PFS ratesetting steps described above. Because the PE methodology is budget neutral, inaccuracies in the PE/HR data for some specialties can significantly impact the overall pool of PE available to distribute across all services, and therefore overall valuation and payment. We appreciate the AMA's PPI and CPI Survey data collection efforts, and recognize the significant costs incurred to collect the data. However, our initial review of the new data raises substantive concerns about their accuracy, utility, and suitability as an immediate replacement for the current PE/HR data and cost shares for use in allocating nearly $91 billion in payments across PFS services. These concerns relate to issues including: Low Response Rates and Representativeness: A primary concern is the low response rate of the surveys. The 2024 PPI Survey had a response rate of 3 to 7 percent, depending on whether practices that did not click through the invitation email link were counted as non-respondents. The CPI Survey had a slightly higher response rate between 7 to 9 percent. In comparison, the 2008 PPIS had a response rate of 12 percent. Low response rates raise concerns as to whether responding practices are systematically different from sampled practices that did not or could not respond. Additionally, in response to lower-than-expected response rates, the AMA allowed 102 practices to volunteer to participate in the survey. Although most of these volunteer practices did not complete the survey, allowing practices to volunteer data adds to concerns about the representativeness of the data. Additionally, the 2008 PE/HR estimates were based on the observations (about half of responses) that had no missing expense data, whereas the 2024 PE/HR estimates and the shares are based on observations that had at least some non-missing data where the missing data was imputed as described in the Survey Methods Report (Step 6).\1\ It should be noted that some expense categories were reported more consistently by survey respondents. For example, 97 percent of the respondents reported compensation (physician work) compared to only 69 percent that were able to report non-billable drugs (direct expense under supplies) and information technology (indirect expense). Similarly, many survey respondents were not able to separately report expenses for qualified health providers (QHPs). Nearly 40 percent of the responses used in the calculation of the PE/HR estimates reported that they had nurse practitioners or physician assistants in their practice, but only 27 percent were able to separately report non- physician compensation expenses. --------------------------------------------------------------------------- \1\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf. --------------------------------------------------------------------------- Small Sample Sizes and Sampling Variation: Due in part to the low response rates, the number of respondents was small for many specialties included in the 2024 PPI and CPI data. For example, the PE/ HR measures for Vascular Surgery are based upon responses from only 20 practices. Moreover, the PPI and CPI survey estimates give more weight to responses from practice types that would otherwise be under- represented in the sample, relative to the population of all eligible practices in a given specialty. For example, such an adjustment would be applied if the sample contained a higher proportion of facility- based practices than there are in the full population of practices in a given specialty. Applying such weights generally results in estimates that are less precise than an unweighted sample of a given size. One way to quantify this is via the effective sample size, which estimates the sample size from an unweighted sample that would be required to produce survey estimates that are as precise as those from the weighted sample. The effective sample size can be estimated as the ratio of the sample size to the design effect, which is reported in the PPI/CPI Methods Reports.2 3 For Vascular Surgery, the [[Page 32370]] reported design effect is 1.82, meaning that the 20 observations correspond to an effective sample size of only 11 (calculated as 11.0=20/1.82). For 12 of 18 broad specialty groupings reported in the 2024 PPI Survey, the effective sample size is less than 18.0 and for four of these specialties the effective sample size is less than 10.0. Similarly, in the CPI Survey data, the effective sample sizes are also small, with all but one below 20.0, and as low as 6.2 for Oral Surgery. Not including practices that volunteered, only 327 sampled practices completed the 2024 PPI Survey compared to 3,088 anticipated completions. --------------------------------------------------------------------------- \2\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf. \3\ https://www.ama-assn.org/system/files/cpi-survey-methods-report-main-report.pdf. --------------------------------------------------------------------------- The low sample sizes contribute to substantial statistical uncertainty regarding the true specialty-level PE/HR measures. Figure A-B1 illustrates the 95 percent confidence intervals for direct and indirect PE/HR as reported in the 2024 PPI/CPI Surveys. The large points represent the new PE/HR estimates, the bars indicate the confidence intervals, and the smaller points show the current PE/HR estimates used in PFS ratesetting from the 2008 PPIS. The 2024 CPI and PPI Survey confidence intervals are so broad that they cover most of the original 2008 PPI PE/HR values in nominal dollars (that is, not adjusted for inflation). Therefore, in most cases, the new data are unable to establish statistically significant changes from the status quo, especially since the old PE/HR measures were themselves estimated with substantial levels of statistical uncertainty. Even so, the new PE/HR estimates differ enough from the old ones that many specialty- level impacts of adopting the new data are quite large. When translated into RVUs, the PE/HR standard errors for specialties such as Cardiology, Pathology, Ophthalmology, and Vascular Surgery correspond to a wide range of payments for services provided by those specialties meaning that the new data are compatible with a wide range of specialty impacts for many specialties. Lack of Comparability to Previous Survey Data: The 2024 PPI and CPI Survey data groups specialties in a considerably different way from the current structure, with 29 specialty groupings compared to 51 in the 2008 data. We found that using the 2008 PE/HR data averaged within the 2024 PPI Survey specialty groupings would lead to large specialty-level impacts in some cases, further complicating comparisons between the old and new data and indicating that the new 2024 specialty groupings is impactful on redistribution among the PFS alone. We refer readers to section VI. of this proposed rule for discussion of the impacts of the 2024 PPI Survey specialty groupings on PFS ratesetting. It is also unclear why some specialties were collapsed into relatively broad groups for the purposes of data collection and reporting while others were not. Potential Measurement Error: We are concerned that sampled practices were not able to accurately report the data necessary to respond to the PPI and CPI Surveys. For example, the survey contractor found that practices frequently had challenges reporting the number of physicians working in the practice. One may expect that the number of physicians in a practice is relatively easier for practices to measure than some of the specific costs integral to reporting PE/HR. However, the contractor noted that--prior to an adjustment--their estimate of the total number of physicians was nearly three times as large as the number of physicians in their sampling frame which ``indicated a large potential for measurement error in this estimate.'' \4\ Also, because information on the number of physicians in each practice was available from external data which were obtained before survey data were collected, to inform the survey design, we believe it is likely that the number of physicians was highlighted as having high potential measurement error because it was possible to compare this measure against external data. Moreover, some responding practices reported that it took more than 40 hours to complete the survey, which suggests that the required data are not readily captured by their accounting systems and therefore may not be fully reliable. --------------------------------------------------------------------------- \4\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf. --------------------------------------------------------------------------- Thus, we are left with doubts about not just the amount of data collected, but its quality as well. Missing and Incomplete Data Submission: The PPI Survey summary data was submitted to CMS in January 2025 and the CPI Survey summary data in February 2025. These initial submissions were missing from many of the elements required to analyze the data and determine their usability in our PE methodology. We inquired about these elements and have since received some additional information, but some of the information was not available due to the survey contract concluding, such as estimates based solely on the survey responses that had no missing expense data or the impact of the trims and edits of the data described in the PPI Survey Methods Report. Additionally, some data is completely missing from the submission, therefore we had to utilize old PE/HR data in analyses for specialties such as Independent Diagnostic Testing Facilities (IDTFs) when developing models to incorporate the data. Additionally, the American Occupational Therapists Association (AOTA) requested the continued crosswalk of PE/HR data from Physical Therapy to Occupational Therapy because the CPI respondents may have indirectly reported the salaries of occupational therapy assistants with provider compensation rather than including their salaries in clinical staff compensation. Additionally, there is summary data provided from the PPI Survey \5\ that are not provided for the CPI Survey.\6\ For example, the PPI Survey summary data include two lines--``MEI shares'' and ``All [specialties]''--that could presumably be used to establish the share of total RVUs that should be attributed to work, practice expense, and malpractice, but we do not believe that they reflect the specialties' data from the CPI Survey, even though those specialties are included in PFS ratesetting, account for a significant portion of the PFS PE RVU pool, and draw from the same pool of RVUs as the PPI Survey specialties. Similarly, we do not have the corresponding CPI Survey specialty weighting information provided to CMS for the PPI Survey specialties, therefore, we have limited information to develop an approach for calculating shares for all CMS specialties accounted for in both the PPI and CPI Surveys. --------------------------------------------------------------------------- \5\ https://www.ama-assn.org/system/files/table-1-results-from-ppi.pdf. \6\ https://www.ama-assn.org/system/files/table-1-results-from-cpi-final.pdf. --------------------------------------------------------------------------- In an effort to incorporate PPI and CPI Survey specialties' data despite the lack of analogous summary data, we developed possible methods to weight the data for all CMS specialties in a cohesive manner for use in the PFS PE methodology such as estimates of total RVUs and total service time by specialty used for CY 2026 PFS ratesetting. We refer readers to section VI. of this proposed rule for discussion of the different weighting methodologies and their resulting shares of work, PE, and MP. Overall, the small sample sizes and the apparent presence of high levels of measurement error in data elements that could be compared to external estimates suggest that specialty-level PE/HR measures may be challenging to measure reliably through voluntary surveys alone. We note that the [[Page 32371]] interested parties may concur with this assertion based on the Methods Report, which states considerations for future data collection efforts that may forego the survey structure and rely on other practice expense sources such as tax returns. We believe that a more efficient and transparent system that could be updated on a regular basis may be possible using available administrative data (such as Medicare claims; hospital cost reports; publicly-reported tax information such as from IRS Form 990; and data collected by other agencies, such as the Census Bureau's Service Annual Survey (SAS)) to the fullest extent possible and relying on survey data only to fill gaps only where available data do not exist. An alternative to collecting any survey data would be to modify the PE allocation system so that it only relies only on data that can be measured accurately and on an on-going basis. For example, if there are components of indirect PE that are not captured in administrative data, those expense categories could potentially be re- classified as direct costs and accounted for in a manner similar to how direct costs are currently considered. Beyond the use of the data in our PE methodology, we need information on the total share of PFS payments that should be allocated for work, PE, and MP. Data collected in the 2024 PPI and CPI Surveys could be used for this purpose, as well as potentially be considered in a construction of the MEI in the future; however, there still remain underlying concerns with the sample representativeness for these purposes. The AMA has asserted that shares derived from data collected from the Service Annual Survey (SAS) for the 2017-based MEI miss many physicians who work in facility settings and thereby understate the percent of total PFS payments that should be allocated to physician work. The data needed to derive the three component shares (work, PE, and MP) are more aggregated than the specialty-level PE/HR data required for the PE methodology, so we have fewer concerns with the small sample sizes for this application. However, we continue to have similar concerns with the data related to measurement error and sample representativeness for purposes of the shares. BILLING CODE 4120-01-P [[Page 32372]] [GRAPHIC] [TIFF OMITTED] TP16JY25.011 BILLING CODE 4120-01-C At the time of the publication of this proposed rule, we continue to conduct ongoing analyses on the potential impact of the AMA's PPI and CPI Survey data on PFS ratesetting. Due to overarching concerns with the data described above and our previously described policy goal to balance PFS payment stability and predictability with incorporating new data through routine updates to the MEI, we reiterate that we are not proposing to implement the PE/HR data or cost shares from the AMA's survey data at this time, and are proposing instead to maintain the current PE/HR data and cost shares for CY 2026 PFS ratesetting. At the same time, we remain focused on proposals that reflect evolutions in practice, including the site of service payment differential discussed below, while we continue to hold strong interest in specialty-level practice expense updates. Consequently, we intend to work with interested parties, including the AMA, to understand whether and how such data should be used in PFS ratesetting in future rulemaking. c. Updates to Practice Expense (PE) Methodology--Site of Service Payment Differential While we are not proposing to incorporate the PPI and CPI Survey data into PFS ratesetting for CY 2026, we are proposing a significant refinement to our PE methodology to better reflect trends in physician practice settings. As detailed in the description of the [[Page 32373]] practice expense methodology above, many services have a site of service payment differential between the facility (F) and nonfacility (NF) settings under the PFS. Services furnished in the nonfacility setting, such as a physician's office, include the physician work RVUs, direct costs for supplies, clinical staff, and equipment, and indirect costs allocated based on the direct costs and the greater of either the clinical labor costs or the physician work RVUs. In the facility setting, the payment rate includes physician work RVUs and the indirect practice expense allocated based on the physician work RVU. The direct costs in the facility setting are paid under a different payment system than the PFS, such as the OPPS. Indirect costs allocated to services furnished in the facility setting are meant to reflect the typical costs associated with practice expenses in that setting of care. In the decades since implementing the PE methodology, there have been significant transformations to the landscape of the healthcare delivery system in the United States, particularly regarding physician practice patterns. Historically, private practice was the dominant model for physicians, offering them autonomy, flexibility, and the opportunity to build independent practices. Specifically, in 1988, approximately 72 percent of physicians were full or part owners in their practice.\7\ This percentage had dropped to 35.4 percent by 2024, representing a 52 percent decrease, with a corresponding rise in physicians in hospital-owned practices and physicians employed directly by a hospital. The percentage of physicians in hospital-owned practices has increased by over 47 percent, from 23.4 percent in 2012 to 34.5 percent in 2024. Similarly, 12.2 percent of physicians were employed directly by a hospital (or contracted directly with a hospital) in 2024, up from 5.6 percent in 2012.\8\ In their June 2025 Report to Congress,\9\ MedPAC notes that there are 9 specialties where 60 percent of the clinicians who billed Medicare furnished 90 percent or more of their services in the facility setting. These trends indicate a steady decline in the percentage of physicians working in private practice, with a corresponding rise in physician employment by hospitals; and growth in the percentage of physicians who practice exclusively, or almost exclusively, in the facility setting. When the PFS was established, the methodology for allocating indirect practice expense was based in part on an assumption that the physician maintained an office-based practice even when also practicing in a facility setting. In that context, the PE methodology has allocated the same amount of indirect costs per work RVU, without regard to setting of care. --------------------------------------------------------------------------- \7\ Kane CK. Emmons, DW. New data on physician practice arrangements: private practice remains strong despite shifts toward hospital employment. Chicago (IL): American Medical Association; 2013. Policy Research Perspective 2013-2. \8\ Kane CK. Physician Practice Characteristics in 2024: Private Practices Account for Less Than Half of Physicians in Most Specialties. American Medical Association. \9\ MedPAC. (2025). June 2025 Report to the Congress: Medicare Payment Policy. Chapter 1 Reforming physician fee schedule updates and improving the accuracy of relative payment rates. https://www.medpac.gov/wp-content/uploads/2025/06/Jun25_MedPAC_Report_To_Congress_SEC.pdf. --------------------------------------------------------------------------- We note that, in the AMA's comment letter on the CY 2023 PFS proposed rule,\10\ they stated that physician practices maintain some indirect practice expense costs for physicians who are solely facility- based such as coding, billing, and scheduling. We acknowledge that these indirect costs should be accounted for in PFS payment through PE RVUs, but we believe that allocating the same amount of indirect practice expense based on work RVUs in both settings may overstate the range of indirect costs incurred by facility-based physicians if it is now less likely that they would maintain an office-based practice separate from their facility practice. In a 2018 report developed under contract with CMS, RAND noted that ``operating from the perspective of paying for the `typical' instance of a procedure, these analyses suggest that the current system could be improved by shifting more of the allocation of PE RVUs to the physician office setting''.\11\ As MedPAC notes in their June 2025 report, ``In cases when clinicians practice exclusively or almost exclusively in a facility, or where a facility is financing indirect PE for clinicians, payment to both entities for indirect PE costs may be duplicative and unnecessary''. While the relative relationship between the PE allocated to services furnished in a facility and nonfacility setting may have been more reflective of the actual expenses incurred by physicians when the PE methodology was originally established, maintenance of that element of the methodology in the face of changing practice patterns likely represents an imbalance of the practice expense allocated to the facility relative to the nonfacility. Within the PFS relative value system, any overstatement of practice expenses in the facility setting would affect the allocation of indirect costs in the nonfacility setting. This dynamic, in which relative resources involved in furnishing PFS services may not be adequately reflected in facility and nonfacility settings, has the potential to contribute to broader undesirable financial incentives toward higher-priced settings of care, like hospitals, and away from more efficient settings, like physician offices.\12\ \13\ \14\ This could result in unnecessary costs for payers and beneficiaries, and obstacles to physicians and other professionals operating independent practices. --------------------------------------------------------------------------- \10\ https://downloads.regulations.gov/CMS-2023-0121-2694/attachment_1.pdf. \11\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara

O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al.

``Practice Expense Methodology and Data Collection Research and Analysis.'' RAND Corporation, April 11, 2018. https://www.rand.org/pubs/research_reports/RR2166.html. \12\ https://pmc.ncbi.nlm.nih.gov/articles/PMC4191490/ #:~:text=Using%20generally%20accepted%20accounting%20practices,to%20m ore%20intense%20resource%20use. \13\ https://healthcostinstitute.org/hcci-originals-dropdown/all-hcci-reports/shifting-care-office-to-outpatient. \14\ https://www.bcbs.com/dA/392da3b5a7/fileAsset/BHI%20Issue%20Brief%20December_121323_SiteNeutral.pdf. --------------------------------------------------------------------------- We share MedPAC's concerns regarding the potential for duplicative payment under the current PE methodology for allocating indirect costs for physicians practicing in the facility setting. Allocating the same amount of indirect PE per work RVU for services furnished in the facility setting as the nonfacility setting may no longer reflect contemporary physician practice trends. As we noted above, data suggests that fewer than half of physicians currently own their practices, but the underlying assumption embedded in the PFS payment methodology presumed that physicians generally maintained office practices (and incurred associated indirect costs) even when they furnished care in facility settings. For these reasons, for each service valued in the facility setting under the PFS, we are proposing to reduce the portion of the facility PE RVUs allocated based on work RVUs to half the amount allocated to nonfacility PE RVUs beginning in CY 2026. This proposed change would occur in step 8 of the PE RVU Methodology described earlier in this section, in which indirect allocators (direct costs, clinical labor, and work RVUs) are assigned. For example, the work RVU for CPT code 33533 (Coronary artery bypass, using arterial graft(s); single arterial graft) is 33.75. For CY 2025, using the full work RVU as an indirect allocator, CPT code 33533 had approximately 12 indirect PE RVUs. Under this proposed change to the [[Page 32374]] methodology, where we would reduce the portion of the facility PE RVUs allocated based on work RVUs to half the amount allocated to nonfacility PE RVUs, CPT code 33533 would have approximately 7.2 indirect PE RVUs. We note that this proposed change to the indirect cost allocation methodology is intended to better recognize the relative resources involved in furnishing services paid under the PFS in facility and nonfacility settings. We compare this proposed change to our current methodology, which functionally presumes approximately equal indirect costs incurred by physicians across sites of service. This presumption was initially made in the context of most practitioners maintaining office practices independent of the facilities in which they provided care, and as we discussed above, appears to be inconsistent with contemporary trends in physician practice. We understand from the AMA's comment letter on the CY 2023 PFS proposed rule noted above that physician practices may incur some indirect PE costs (such as coding, billing, and scheduling) for physicians who are facility-based. To better inform our consideration of how to account for any such costs in the PE RVU methodology, we are seeking comment on the specific types and magnitude of indirect PE costs incurred that are attributable to physicians who practice in part or exclusively in a facility setting, and any variables that affect whether and to what extent a practice would incur them. We are also seeking comments on whether our proposal to reduce the portion of the facility PE RVUs allocated based on work RVUs to half the amount allocated to nonfacility PE RVUs is an appropriate reduction or whether we should consider a different percentage reduction for CY 2026 or in future years. While our proposed change to the methodology represents a starting point to correcting potential historic distortions in the allocation of indirect PE costs across settings of care, we intend to further examine our methodology and consider additional refinements based upon public comments received and any studies or data sources identified. We are seeking comments on whether there are additional data sources that might help identify a more precise site of service difference in the allocation of indirect PE RVUs. We believe the implementation of this proposal would more accurately account for the resource costs involved in physicians furnishing care across all settings and correct potential distortions in the allocation of indirect PE under our current methodology. We refer readers to section VI. of this proposed rule for discussion of the impacts of this proposal on CY 2026 PFS ratesetting. We are specifically soliciting comments on whether and how this proposed policy should apply to codes with MMM global periods (maternity services) and how it could specifically impact access to maternity services, given our understanding that many of the patient encounters across those services occur in the office setting. As we noted in the CY 2024 PFS final rule (88 FR 78949), maternity services are unique within the PFS in that they are the only global codes that provide a single payment for almost 12 months of services, which include a relatively large number of E/M visits performed along with delivery services and imaging; and were valued using a building-block methodology as opposed to the magnitude estimation method. Given that the work RVUs for maternity services encompass significant care during this lengthy period that may be furnished in the nonfacility setting, we are soliciting comment on whether we should include these services in our proposed policy to reduce the allocation of PE based on work in the facility setting. We welcome comments on all aspects of this proposal, including ways to improve the allocation of facility and nonfacility PE RVUs in the future. We also seek comments on alternative approaches to improving the allocation of indirect PE as outlined in Chapter 1 of MedPAC's June 2025 Report to the Congress (pages 27 through 33). d. Use of OPPS Data for PFS Ratesetting For several kinds of PFS services, we are proposing to deviate from the use of the AMA survey data, and instead utilize data from auditable, routinely updated hospital data to either set relative or absolute rates, especially for technical services paid under the PFS. This approach promotes price transparency across settings, offers more predictable ratesetting outcomes, and limits the influence of anecdotal/survey data. We refer readers to sections II.E.24 and II.E.30 of this proposed rule for specific proposals related to radiation treatment delivery and superficial radiation therapy services and remote patient monitoring and remote therapeutic monitoring services respectively and section II.K of this proposed rule for specific proposals related to skin substitutes. Although we are proposing different methodologies for use of OPPS data based on service type, we are seeking comment on whether it would be preferable to adopt a single methodology, such as a scaler and how such a methodology would account for differences in practice expenses between services, such as services with extensive clinical staff time versus services where the valuation is primarily driven by the equipment costs. 6. Payment for Services in Urgent Care Centers In the CY 2025 PFS proposed rule (89 FR 61746 through 61747), we sought comment on urgent care centers, noting that interested parties describe that hospital emergency departments are often used by beneficiaries to address non-emergent urgent care needs that could be appropriately served in less acute settings, but where other settings, such as physician offices, urgent care centers or other clinics, are not available or readily accessible. Patients enter EDs to treat common conditions like allergic reactions, lacerations, sprains and fractures, common respiratory illnesses (for example, flu or RSV), and bacterial infections (for example, strep throat, urinary tract infections or foodborne illness). Conditions like these often can be treated in less acute settings. We stated that we were interested in system capacity and workforce issues broadly and are interested in hearing more on those issues, including how entities such as urgent care centers can play a role in addressing some of the capacity issues in emergency departments. In response to our CY 2025 PFS proposed rule (89 FR 61746 through 61747) question about whether the current ``Urgent Care Facility'' Place of Service code (POS 20) adequately identify and define the scope of services furnished in such settings other than the existing place of service codes,, commenters stated that the current place of service (POS) definitions are inadequately differentiated, especially if CMS wishes to encourage proliferation of the type of urgent care centers that can provide suitable alternatives to EDs, noting that POS 11 generally refers to physician offices that provide diagnostic and therapeutic care in an office setting, by appointment, typically during regular business hours; POS 17 generally refers to clinics that are attached to retail operations, such as pharmacies, grocery stores or big box stores, and provide low-acuity primary and preventive health care, such as vaccinations; and POS 20 refers to Urgent Care Facilities but does not adequately differentiate between those that offer services more akin to the typical general practitioner's office and those that offer enhanced diagnostic and therapeutic services and extended [[Page 32375]] hours. They recommended that the creation of a new POS code describing ``enhanced''' urgent care centers that offer specific diagnostic and therapeutic services and that operate outside typical business hours could fill this need. In response to our CY 2025 PFS proposed rule (89 FR 61746 through 61747) question about whether the current ``Urgent Care Facility'' Place of Service code (POS 20) adequately identify and define the scope of services furnished in such settings other than the existing code set and valuation, they stated that Medicare's fee-for- service payment systems do not recognize and adequately value services furnished in Urgent Care Clinics (UCCs) and stated that while there is some overlap in the types of professional services furnished in UCCs and physician offices, UCCs that operate for extended hours and that have enhanced diagnostic and therapeutic capabilities incur additional costs to provide these services. In recent months, an interested party has requested that for CY 2026, we consider adopting a new Place of Service code for ``enhanced'' urgent care centers as well as create a new add-on G-code to describe the resource costs involved when practitioners furnish certain services in enhanced urgent care centers that offer extended hours and certain diagnostic and therapeutic services. The interested party suggested the following descriptor: ``Visit complexity inherent to evaluation and management associated with medical care services that serve as the immediate focal point for all needed urgent, non-emergent health care services and/or with urgent, non-emergent medical care services that are related to diagnosis and treatment of an unscheduled, ambulatory patient's urgent, non-emergent conditions. (Add-on code, list separately in addition to office/outpatient evaluation and management visits, new or established)'' and recommended that it be valued based on a crosswalk to HCPCS code G2211 (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 condition or a complex condition. (add- on code, list separately in addition to office/outpatient evaluation and management visit, new or established) and made billable with all levels of office/outpatient E/M visits for both new and established patients when services are furnished in an enhanced urgent care center. We are seeking comments from the public regarding whether separate coding and payment is needed for evaluation and management visits furnished at urgent care centers, including whether or not an add-on code would be appropriate or if a new set of visit codes would be more practical We note that the process for requesting new place of service codes or modification of existing place of service codes is described on the CMS website at https://www.cms.gov/medicare/coding-billing/place-of-service-codes/process-requesting-new-codes-modification-existing-codes. Additionally, as discussed in Section II.B of this proposed rule, many PFS services have a site of service payment differential between the facility and nonfacility settings under the PFS. Services furnished in the nonfacility setting, such as a physician's office, include direct costs for supplies, clinical staff, and equipment, the physician work RVU and indirect practice expense allocated based on the direct costs and the physician work RVU. In the facility setting, the payment rate includes physician work and the indirect practice expense allocated based on physician work. The direct costs in the facility setting are paid under a different payment system other than the PFS, such as the OPPS. PE allocated to services furnished in the facility setting is meant to reflect typical costs associated with practice expenses in that setting of care. We note that we are proposing a change in our PE RVU methodology to better recognize variations in indirect costs between facility and nonfacility settings of care in section II.B of this rule. We note here that we are likewise interested in understanding how practice costs, including but not limited to indirect costs, may vary among different nonfacility settings of care. We are also interested in receiving feedback regarding how either the code set, or the PE methodology might be improved to better recognize the relative resources involved in furnishing services across these kinds of settings.

1. Background

Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a periodic review, not less often than every 5 years, of the relative value units (RVUs) established under the PFS. Section 1848(c)(2)(K) of the Act requires the Secretary to periodically identify potentially misvalued services using certain criteria and to review and make appropriate adjustments to the relative values for those services. Section 1848(c)(2)(L) of the Act also requires the Secretary to develop a process to validate the RVUs of certain potentially misvalued codes (PMVC) under the PFS, using the same criteria used to identify PMVC, and to make appropriate adjustments. As outlined in section II.E. of this proposed rule, under Valuation of Specific Codes, each year we develop appropriate adjustments to the RVUs taking into account recommendations provided by the American Medical Association (AMA)/Specialty Society Relative Value Scale (RVS) Update Committee (referred to as the RUC), MedPAC, and other interested parties. For many years, the RUC has provided us with recommendations on the appropriate relative values for new, revised, and potentially misvalued PFS services. We review these recommendations on a code-by- code basis and consider these recommendations in conjunction with analyses of other data, such as claims data, to inform the decision- making process as authorized by statute. We may also consider analyses of work time, work RVUs, or direct practice expense (PE) inputs using other data sources, such as the Veterans Health Administration (VHA), National Surgical Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons (STS), and the Merit-based Incentive Payment System (MIPS) data. In addition to considering the most recently available data, we assess the results of physician surveys and specialty recommendations submitted to us by the RUC for our review. We also consider information provided by other interested parties such as from the general medical-related community and the public. 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 (https://www.medpac.gov/document/report-to-the-congress-2006-medicare-payment-policy/), MedPAC discussed the importance of appropriately valuing physicians' [[Page 32376]] services, stating that misvalued services can distort the market for physicians' services, as well as for other health care services that physicians order, such as hospital services. In that same report, MedPAC postulated that physicians' services under the PFS can become misvalued over time. MedPAC stated, ``When a new service is added to the physician fee schedule, it may be assigned a relatively high value because of the time, technical skill, and psychological stress that are often required to furnish that service. Over time, the work required for certain services would be expected to decline as physicians become more familiar with the service and more efficient in furnishing it.'' We believe services can also become overvalued when PE costs decline. This can happen when the costs of equipment and supplies fall, or when equipment is used more frequently than is estimated in the PE methodology, reducing its cost per use. Likewise, services can become undervalued when physician work increases, or PE costs rise. As MedPAC noted in its March 2009 Report to Congress (https://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 current processes for consideration of coding changes), which may involve consolidating 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 PMVC as specified in section 1848(c)(2)(K)(ii) of the Act, and we intend to continue our work examining PMVC in these areas over the upcoming years. As part of our current process, we identify PMVC 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 PMVC for review. Through our public nomination process for PMVC established in the CY 2012 PFS final rule with comment period (76 FR 73026, 73058 through 73059), other individuals and groups submit nominations for review of PMVC as well. Individuals and groups may submit codes for review under the PMVC 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 e-mailbox at [email protected], with the phrase ``Potentially Misvalued Codes'' and the referencing CPT code number(s) and/or the CPT descriptor(s) in the subject line. Physical letters for nominations should be sent via the U.S. Postal Service to the Centers for Medicare & Medicaid Services, Mail Stop: C4-01-26, 7500 Security Blvd, Baltimore, Maryland 21244. Envelopes containing the nomination letters must be labeled ``Attention: Division of Practitioner Services, Potentially Misvalued Codes.'' Nominations for consideration in our next annual rule cycle should be received by our February 10th deadline. Since CY 2009, as a part of the annual PMVC review and Five- Year Review process, we have reviewed over 1,700 PMVC 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 PMVC is included in the CY 2012 PFS final rule with comment period (76 FR 73052 through 73055). In the same CY 2012 PFS final rule with comment period, we finalized our policy to consolidate the review of physician work and PE at the same time and established a process for the annual public nomination of potentially misvalued services. In the CY 2013 PFS final rule with comment period (77 FR 68892, 68896 through 68897), we built upon the work we began in CY 2009 to review PMVC that have not been reviewed since the implementation of the PFS (so-called ``Harvard-valued codes'' \15\). In the CY 2009 PFS proposed rule (73 FR 38589), we requested recommendations from the RUC to aid in our review of Harvard-valued codes that had not yet been reviewed, focusing first on high-volume, [[Page 32377]] low intensity codes. In the fourth Five-Year Review of Work RVUs published in a separate notice (76 FR 32410, 32419), we requested recommendations from the RUC to aid in our review of Harvard-valued codes with annual utilization of greater than 30,000 services. In the CY 2013 PFS final rule with comment period, we identified specific Harvard-valued services with annual allowed charges that total at least $10,000,000 as potentially misvalued. In addition to the Harvard-valued codes, in the CY 2013 PFS final rule with comment period we finalized for review a list of PMVC that have stand-alone PE (codes with physician work and no listed work time and codes with no physician work that have listed work time). We continue each year to consider and finalize a list of PMVC that have or will be reviewed and revised as appropriate in future rulemaking. --------------------------------------------------------------------------- \15\ The research team and panels of experts at the Harvard School of Public Health developed the original work RVUs for most CPT codes, in a cooperative agreement with the Department of Health and Human Services (HHS). Experts from both inside and outside the Federal Government obtained input from numerous physician specialty groups. This input was incorporated into the initial PFS, which was implemented on January 1, 1992. ---------------------------------------------------------------------------

3. CY 2026 Identification and Review of Potentially Misvalued Services

In the CY 2012 PFS final rule with comment period (76 FR 73058 through 73059), we finalized a process for the public to nominate PMVC. In the CY 2015 PFS final rule with comment period (79 FR 67548, 67606 through 67608), we modified this process whereby the public and interested parties may nominate PMVC 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 PMVC may include the following: Documentation in peer reviewed medical literature or other reliable data that demonstrate changes in physician work due to one or more of the following: technique, knowledge and technology, patient population, site-of-service, length of hospital stay, and work time. An anomalous relationship between the code being proposed for review and other codes. Evidence that technology has changed physician work. Analysis of other data on time and effort measures, such as operating room logs or national and other representative databases. Evidence that incorrect assumptions were made in the previous valuation of the service, such as a misleading vignette, survey, or flawed crosswalk assumptions in a previous evaluation. Prices for certain high cost supplies or other direct PE inputs that are used to determine PE RVUs are inaccurate and do not reflect current information. Analyses of work time, work RVU, or direct PE inputs using other data sources (for example, VA, NSQIP, the STS National Database, and the MIPS data). National surveys of work time and intensity from professional and management societies and organizations, such as hospital associations. We evaluate the supporting documentation submitted with the nominated codes and assess whether the nominated codes appear to be PMVC 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 PMVC. The public has the opportunity to comment on these and all other proposed PMVC. In each year's final rule, we finalize our list of PMVC. a. Public Nominations In each proposed rule, we seek nominations from the public and from interested parties of codes that they believe we should consider as potentially misvalued. We receive public nominations for PMVC by February 10th and we display these nominations on our public website (https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending), where we include the submitter's name, their associated organization and the submitted studies for full transparency. We sometimes receive submissions for specific, PE-related inputs for codes, and discuss these PE-related submissions, as necessary under the Determination of PE RVUs section of the rule. We summarize below this year's submissions under the PMVC initiative. For CY 2026, we received 11 requests concerning various codes as PMVC. The nominations are as follows: (1) Maxillofacial Prosthetic Services (CPT codes 21076, 21077, 21079, 21080, 21081, 21082, 21083, 21084, 21085, 21086, 21087) An interested party nominated CPT codes 21076 (Impression and custom preparation; surgical obturator prosthesis), 21077 (Impression and custom preparation; orbital prosthesis), 21079 (Impression and custom preparation; interim obturator prosthesis), 21080 (Impression and custom preparation; definitive obturator prosthesis), 21081 (Impression and custom preparation; mandibular resection prosthesis), 21082 (Impression and custom preparation; palatal augmentation prosthesis), 21083 (Impression and custom preparation; palatal lift prosthesis), 21084 (Impression and custom preparation; speech aid prosthesis), 21085 (Impression and custom preparation; oral surgical splint), 21086 (Impression and custom preparation; auricular prosthesis), and 21087 (Impression and custom preparation; nasal prosthesis) as potentially misvalued based on what they believe to be missing, outdated, and undervalued practice expense inputs. The nominator stated that these misvalued PE inputs (equipment, supplies, and clinical staff time) result in inadequate payment rates to clinicians who furnish these services, which limits patient access to necessary care. The nominator indicated that the physician work values remain accurate for all of the nominated codes. According to the nominator, maxillofacial prosthodontists provide specialized rehabilitation care for patients with compromised oral and facial anatomy due to conditions such as cancer, trauma, or congenital defects, addressing both physical and psychological challenges experienced by such patients. Custom prosthetic obturators are medical devices that restore vital oral functions in cancer patients with palatal defects. These implant-retained devices are prescribed based on the location of the defect: maxillary obturators for hard palate issues, pharyngeal obturators for soft palate problems, or a combination for both. The primary purpose of the intraoral prostheses is to enable patients to speak, eat, and swallow more naturally. The nominator stated that these implants can improve patients' quality of life and may eliminate the need for feeding tubes. The nominator is concerned that CMS payment rates for maxillofacial prosthetic services, which were last reviewed in 1995, are outdated. In particular, the nominator stated that CPT codes 21080 and 21081 have undergone significant changes since the development of their PE values in the mid-1990s. At that time, mandibular reconstruction was rare, and removable prostheses were used to align the jaw. Microvascular reconstruction and virtual surgical planning have since transformed the procedures described by CPT codes 21080 and 21081, allowing precise prosthetic rehabilitation during surgery and improving oral function, speech, and quality of life. The nominator asserted that the PE inputs for CPT codes 21080 and 21081 did not account for these advancements, which did not exist in 1995 when the codes were valued. Furthermore, they stated that when these maxillofacial prosthetic services [[Page 32378]] were valued in 1995, CMS used inaccurate inputs, which they believe did not account for the appropriate clinical staff time and materials required for prostheses. They stated that changes in clinical staff time, supplies, and equipment require the direct PE inputs to be updated. The nominator stated that significant technological advancements have also occurred for extraoral prostheses, such as orbital (CPT code 21077), auricular (CPT code 21086), and nasal prostheses (CPT code 21087). For orbital prostheses, hand sculpting and painting remain time-intensive tasks, with limited use of 3D technology. In auricular prostheses, 3D technology has significantly improved the waxing process. For nasal prostheses, preoperative scanning now helps to shape the prosthesis, leading to better cosmetic outcomes. All extraoral prostheses (for example, orbital, auricular, and nasal) now commonly use 3D technology, craniofacial implants, and color-matching devices, which were not standard in the 1990s. The nominator asserted that the practice expense inputs for these codes fail to account for these advancements. Additionally, the nominator asserts that there are other instances where the nominated codes fail to reflect the significant technological advancements in treatment delivery since 1995. The nominator requested an update to the PE inputs for all of the nominated codes, stating that the dental x-ray (ER071), valued at $128,020.91, has been replaced by various pieces of capital equipment. For example, they listed a ``CMS Planmeca CBCT Imaging'' system, which costs $163,767.66, and stated that this takes the place of the x-ray unit, highlighting a notable price difference between the x-ray machine and the CT. Furthermore, they provided a lengthy list of additional equipment (e.g., 3D printer) that is not accounted for in the PE inputs for all of the nominated codes, underscoring the extensive modernization in service delivery since 1995. To support their nomination, the nominator included information on what they believe to be more accurate PE inputs, including invoices for supplies and equipment. For items where invoices paid were unavailable, price quotes from a supplier were included. In addition, their appendices included recommendations for deleting and adding supplies, equipment, and clinical staff time. For more information, we refer readers to the submitted nomination, which is posted in the public use files for this proposed rule available on our public website under PFS Federal Regulation Notices at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices. Although the nomination stated that the work RVUs are accurate as currently valued, because these codes have not been reviewed in the last 30 years, we believe it is appropriate to examine both PE and work inputs. Given the technological advancements the nominator described, there may also be resulting changes in the physician work involved in performing these services, and therefore, a comprehensive review of both practice expense and work values would be appropriate. While we are not proposing to nominate these codes as potentially misvalued, we welcome public comments and recommendations, including those from the RUC, to better understand these codes, particularly regarding typical direct PE inputs and work values. (2) Supervision of Preparation and Provision of Antigens for Allergen Immunotherapy (CPT codes 95145, 95146, 95147, 95148, 95149). An interested party nominated the professional supervision of preparation and provision of stinging insect venom for allergen immunotherapy described by CPT codes 95145 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); single stinging insect venom), 95146 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 2 single stinging insect venoms), 95147 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 3 single stinging insect venoms), 95148 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 4 single stinging insect venoms), and 95149 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 5 single stinging insect venoms) as potentially misvalued, stating that the current payment rates for these CPT codes do not accurately reflect the practice expenses required for these procedures. The nominator indicated that the cost to manufacture venom therapy has drastically increased since the last time these codes were reviewed by the RUC in 2001, citing higher labor and raw material costs. Venom immunotherapy, used for treating insect stings, involves extracting venom from various stinging insects like honeybees and wasps. According to the nominator, the manufacturing process is labor- intensive, requiring 520 staff hours to manually extract venom from 130,000 insects per batch, along with substantial equipment investment. The final product is packaged in single, five, or twelve-dose vials for medical use. For more information, we refer readers to the submitted nomination, which is posted in the public use files for this proposed rule available on our public website under PFS Federal Regulation Notices at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices. The nominator stated that before 1995, venom products were paid under product-specific HCPCS J-codes, but due to infrequent use and limited budget impact on the Medicare trust funds, CMS retired the J- codes and instead bundled venom products within CPT codes 95145, 95146, 95147, 95148, and 95149. According to the nominator, current payment rates for these codes are based on the Harvard valuation and have not been surveyed by the RUC since February 2001. The nominator stated that when surveyed in 2001, the PE inputs for these codes only accounted for swab-pad, antigen, syringe, and gloves. In contrast, the nominator indicated that CPT code 95165 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy; single or multiple antigens (specify number of doses), which was more recently reviewed in 2016 and shares similar PE inputs as the nominated codes, includes additional items such as a surgical cap, gown, mask, alcohol, paper towel, and vial transport envelope. The nominator stated that, according to the 2019 standards for allergen extract compounding under USP Chapter 797,\16\ the procedures described by CPT codes 95145, 95146, 95147, 95148, and 95149 require additional supplies and practice expenses, such as sterile powder-free gloves, face mask, hair net/beard net, gown/sterile garb, isopropyl alcohol, paper towel, sterile empty vials, and albumin saline, in addition to the allergenic extract. The nominator stated that these standards also mandate significantly more annual training for providers, including competency observation, media fill test, gloved fingertip test, and corrective actions. Furthermore, the nominator asserted [[Page 32379]] that the overall cost of venom therapy has increased substantially and submitted invoices to support this statement. --------------------------------------------------------------------------- \16\ https://college.acaai.org/wp-content/uploads/2021/01/Section-21-USP-Compounding-Allergenic-Extracts.pdf. --------------------------------------------------------------------------- At this time, we are not proposing the CPT codes submitted by the nominator as potentially misvalued. CPT codes 95145-95149 are typically billed in conjunction with CPT codes 95115 and 95117. We note that the nominator has listed PE inputs that are also included in the inputs for CPT codes 95115 and 95117 and these same inputs may overlap with inputs included in CPT codes 95145-95149. While the PE inputs that overlap between CPT codes 95145-95149 and 95115 and 95117 may contain the necessary elements, we are seeking feedback regarding these overlapping PE inputs in relation to billing frequencies and the possibility of duplicative payment. Specifically, we request comments on whether these inputs overlap and what potential adjustments should be made to avoid duplicative payment. We request comments regarding the standard minutes for clinical activity code CA008 (Perform regulatory mandated quality assurance activity (pre-service)) and the standard unit measurement for supply code SH004 (albumin saline). Additionally, we seek input regarding the establishment of clinical activity codes for two specific procedures requested by the nominator: cleaning and disinfecting the compounding area, and sterile preparation of compounds. Furthermore, anomalies were identified related to the clinical activities described by CA021 (Perform procedure/service--NOT directly related to physician work time). Specifically, the typical times associated with these activities in the RUC database are as follows: 2.3 minutes for CPT code 95145, 3.3 minutes for CPT code 95146, 2.3 minutes for CPT code 95147, 3.3 minutes for CPT code 95148, and 4.3 minutes for CPT code 95149. The nominator has requested 10 minutes for all of the nominated CPT codes without providing any justification for this time. Regarding the clinical labor direct inputs (L037D), we seek comments on several aspects of dosage preparation, including but not limited to: the typical number of dosages, the time required for preparation, the number of vials or dosages that can be prepared from each vial, and the total time needed for preparation of these vials and dosages. Additionally, we seek information about the derivation of the 2.3-minute time. This information would help inform the appropriate time for both clinical labor activities. We received several invoices for mixed and single venom prices from the nominator; however, we are unable to determine the number of individual venoms in the mixed venom preparations. Specifically, supply codes SH009 (antigen, venom) and SH010 (antigen, venom, tri-vespid) are currently priced at $35.58 and $69.21 respectively, with prices last updated in the CY 2024 PFS final rule (88 FR 78967). The nominator stated that the venom cost has increased to $481.50 for a 5-dose wasp venom as of April 1, 2024, and submitted invoices to support this claim to update the current price. Since we are unsure whether these invoices are for mixed or single venom prices, we welcome additional invoices and comments regarding the methodology for calculating venom prices using mixture invoices. We welcome feedback to gain a broader understanding of these codes, including how standards of practice have evolved over time, as this information can help identify related coding issues. (3) Electronic analysis of implanted neurostimulator pulse generator/transmitter (CPT codes 95970, 95976, 95977). CPT codes 95970 (Electronic analysis of implanted neurostimulator pulse generator/transmitter (eg, contact group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with brain, cranial nerve, spinal cord, peripheral nerve, or sacral nerve, neurostimulator pulse generator/transmitter, without programming), 95976 (Electronic analysis of implanted neurostimulator pulse generator/transmitter (eg, contact group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with simple cranial nerve neurostimulator pulse generator/transmitter programming by physician or other qualified health care professional), and 95977 (Electronic analysis of implanted neurostimulator pulse generator/transmitter (eg, contact group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with complex cranial nerve neurostimulator pulse generator/transmitter programming by physician or other qualified health care professional) were nominated as potentially misvalued for two reasons identified by the nominator: there has been a significant shift in the clinical specialties utilizing these codes, and the PE inputs currently assigned to these codes may not accurately reflect the costs associated with analyzing and programming the hypoglossal nerve stimulation (HGNS) system. The nominator stated that, from 2017 to 2023, there has been a significant change in the clinical specialties that utilize these codes in the non-facility setting. According to the nominator, while CPT codes 95970, 95976, and 95977 were primarily billed by neurologists when last surveyed by the RUC in 2017, the usage of these codes has shifted away from neurologists toward sleep specialists. The nominator asserted that this shift necessitates changes to the work RVUs and PE inputs for these codes. In addition, the nominator stated that many sleep specialists believe CPT codes 95970, 95976, and 95977 do not appropriately reflect the practice expenses involved in furnishing these services. According to the nominator, a survey conducted among several high-volume sleep specialists (the details of which the nominator did not share with CMS) showed unanimous agreement that these codes do not accurately reflect the practice expense inputs. These three codes currently have 0 minutes of clinical staff time included in the direct PE inputs. However, the nominator stated that based on the survey results the typical clinical staff time spent for patient care was 35 minutes for CPT code 95970, 37 minutes for CPT code 95976, and 46 minutes for CPT code 95977. The nominator stated that CPT codes 95970, 95976, and 95977 should reflect the same clinical staff time as similar analysis and programming procedures, such as CPT codes 93150 (Therapy activation of implanted phrenic nerve stimulator system, including all interrogation and programming), 93151 (Interrogation and programming (minimum one parameter) of implanted phrenic nerve stimulator system), and 93153 (Interrogation without programming of implanted phrenic nerve stimulator system). The nominator stated that these codes more accurately account for the clinical staff time. We appreciate the nominator sharing their survey results from high- volume [[Page 32380]] sleep specialists, which may indicate potential inaccuracies in the direct PE inputs for CPT codes 95970, 95976, and 95977. Our review of the submitted information, however, reveals a lack of survey details (for example, sampling methods, data collection procedures), so it is difficult to understand the context of the information provided by the nominator and identify potential biases of this survey. While we acknowledge potential changes in the specialties utilizing these codes, and sleep medicine's Medicare specialty percentage has grown over time, neurology remains the dominant billing practitioner type. For these reasons, we are not proposing to consider these codes as potentially misvalued. We are, however, seeking comments and additional information on the information provided by the nominator. This includes any analysis or studies demonstrating that one or more of these codes meet the criteria listed in section II.C.3 of this proposed rule, under ``Identification and Review of Potential Misvalued Services,'' particularly regarding changes in practice expense inputs for service delivery. (4) Excimer laser treatment for psoriasis (CPT codes 96920, 96921, 96922). An interested party nominated CPT codes 96920 (Excimer laser treatment for psoriasis; total area less than 250 sq cm), 96921 (Excimer laser treatment for psoriasis; 250 sq cm to 500 sq cm), and 96922 (Excimer laser treatment for psoriasis; over 500 sq cm) as potentially misvalued, due to the CPT Editorial Panel's recent modifications to the code descriptor and allegedly inaccurate data used by CMS in valuing these services. According to the nominator, the misvaluation of these codes creates a significant healthcare access barrier by reducing payment for excimer laser therapy, which disproportionately impacts vulnerable populations while potentially increasing overall healthcare costs. The nominator stated that the low payment rates for these codes make it financially unfeasible for dermatologists to offer this FDA-approved treatment, effectively making it unavailable to Medicare beneficiaries despite its proven effectiveness and potential cost savings. We discussed our review of these codes and our rationale for finalizing the current work RVUs and direct PE extensively in the CY 2025 PFS final rule (89 FR 97797 through 97801). We stated that we disagreed with the RUC recommended work RVUs for CPT codes 96920, 96921, and 96922 of 1.00, 1.07, and 1.32. The RUC noted that there have been multiple reviews of these CPT codes, and the valuation of the codes is currently based on the original valuation over two decades ago in 2002 where the physician time values were lower than the current times. A subsequent review in 2012 adopted new survey times while maintaining the work RVUs from 2002 for CPT codes 96920 and 96922. The RUC noted that for both CPT code 96921 and 96922, with the largest treatment area, the total times had not changed since first implemented more than 20 years ago. At the time we also believed that, since the two components of work are time and intensity, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure had increased, significant decreases in time should be reflected in decreases to work RVUs. We noted that our proposed work RVU of 0.83 maintained the intensity associated with the 2002 review of CPT code 96920, which we believed to be more appropriate than the significant increase in intensity that results from the RUC-recommended work RVU of 1.00 which nearly doubled the current intensity of the code (89 FR 97797). We had no evidence to indicate that the intensity of CPT code 96920 had increased to this degree given how the surveyed work time had substantially decreased. For CY 2026, the nominator raised two issues related to these codes. First, according to the nominator, a coding change by the CPT Editorial Panel that was released in 2024 and effective January 1, 2025, modified the code descriptor from ``Laser treatment for inflammatory skin disease(psoriasis)'' to ``Excimer laser treatment for psoriasis.'' We remind readers that, in April 2022, the RUC referred CPT codes 96920, 96921, and 96922 to the CPT Editorial Panel to capture expanded indications beyond what was currently noted in the codes' descriptions to include laser treatment for other inflammatory skin disorders such as vitiligo, atopic dermatitis, and alopecia areata, and those expanded indications could reflect changes in physician work as compared to the codes' current descriptors. The coding change application was subsequently withdrawn from the September 2022 CPT Editorial Panel meeting when it was determined that existing literature was insufficient and did not support expanded indications at that time. Therefore, these CPT codes were re-surveyed and reviewed at the April 2023 RUC meeting without any revisions to their code descriptors. We note that, according to the CPT Editorial Panel and the RUC's publicly available meeting notes, since the descriptors for CPT codes 96920, 96921, and 96922 were established in 2002, psoriasis is the only approved indication and use for this treatment modality.\17\ --------------------------------------------------------------------------- \17\ https://www.ama-assn.org/system/files/ap-2023-ruc-meeting-minutes.pdf. --------------------------------------------------------------------------- While the nominator is working with the CPT Editorial Panel again to expand the indications for excimer laser treatment beyond psoriasis to include other inflammatory skin conditions, they stated that they believe establishing a temporary G-code for interim coverage is necessary and therefore requested that CMS create coding to more accurately reflect the clinically appropriate use of the excimer laser. The nominator states that this would ensure patients with skin conditions other than psoriasis can access excimer laser treatments without delay. To provide more evidence as to the accuracy of including non- psoriasis inflammatory skin diseases in the code definition, the nominator provided a data compendium supporting the excimer laser's versatility and key studies demonstrating positive outcomes for conditions like vitiligo, atopic dermatitis, leukoderma, and alopecia areata. Reviewing these submitted studies, the nominator stated that sufficient clinical evidence exists to support expanding coverage for excimer laser treatment beyond just psoriasis. The nominator requested that CMS create additional coding to describe the expanded indications for the excimer laser treatment, because the nominator believes that the standard CPT process is time-consuming and could leave many patients without adequate care in the interim; thus, implementing a temporary G-code would ensure continued access to this essential therapy for these patients. Second, the nominator provided additional invoices and data detailing PE costs related to the excimer laser devices. The nominator claimed that their own analysis relies on real-world data (which was not shared with CMS) and shows that CMS has overestimated the utilization rate of excimer lasers. Using their own survey, they found that on average, dermatologists perform 244 excimer laser treatments per device annually, with each treatment requiring approximately 38 to 46 minutes of excimer laser use. This amounts to nearly 15,000 minutes of total utilization per year, resulting in an effective utilization rate of 10 percent, rather than the 50 percent rate currently used by CMS. As stated in section II.B. of this proposed rule, we currently use an equipment utilization rate [[Page 32381]] 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. Based on their real-world device utilization data, the nominator calculated the direct PE cost using CMS' standard equipment formula. The calculated equipment costs are $99.88 for CPT code 96920, $105.14 for CPT code 96921, and $120.91 for CPT code 96922. The nominator also stated that CMS currently assumes a maintenance cost of $7,560 for excimer lasers, based on a 5% maintenance rate applied to a purchase price of $151,200. However, the nominator stated that excimer lasers are technical devices with substantially higher maintenance costs. According to the nominator, the annual service cost for the excimer laser is $30,000, and they claimed that a laser chamber replacement service costs $44,000; however, as discussed in section II.B. of this proposed rule, we finalized a 5 percent factor for annual maintenance in the CY 1998 PFS final rule with comment period (62 FR 33164). As we previously stated in the CY 2016 PFS final rule with comment period (80 FR 70897), we do not believe the annual maintenance factor for all equipment is precisely 5 percent, and we stated that this estimate likely understates the true cost of maintaining some equipment. We also noted that we believe it likely overstates the maintenance costs for other equipment. When we solicited comments regarding data sources containing equipment maintenance rates, commenters could not identify an auditable, robust data source that CMS could use on a wide scale. As a result, in the absence of publicly available datasets regarding equipment maintenance costs or another systematic data collection methodology for determining a different maintenance factor, we did not propose a variable maintenance factor for equipment cost per minute pricing as we did not believe that we have sufficient information at present. Therefore, we remind readers that we do not believe voluntary submissions regarding the maintenance costs of individual equipment items would be an appropriate methodology for determining costs. Moreover, the nominator asserted that CMS currently does not include the costs of consumable gas (code EQ154) and the optical delivery system (code EQ155) in the direct practice expense cost for these services. Based on our review of the January 2012 RUC recommendations submitted to CMS, it appears that these equipment items were removed by RUC PE Subcommittee for CY 2013. The requestor stated that the gas cylinder (EQ154) costs $6,300 (excluding labor and shipping costs), and the optical delivery system (EQ155) costs $7,429; however, no supporting invoices or evidence of the typicality of the equipment items' usage for these services were provided to support the equipment items' reintegration into the codes' direct practice expense. Based on this information, the nominator recommended creating a G- code for excimer laser treatment of inflammatory skin diseases. Furthermore, they requested to include their own real-world data on excimer laser utilization rates in the practice expense calculation, adjust the maintenance cost in the practice expense calculation to reflect the actual cost of maintaining excimer laser devices, and reinstate the costs of consumable gas (code EQ154) and the optical delivery system (code EQ155) in the practice expense calculation. We appreciate the detailed information submitted by the nominator. However, we continue to disagree that CPT codes 96920, 96921, and 96922 are potentially misvalued. We note that the CPT code change request was withdrawn from the AMA in September 2022 due to insufficient supporting literature for expanded indications. Additionally, according to RUC's publicly available meeting notes, psoriasis is the only approved indication and use for this treatment modality since the descriptors for CPT codes 96920, 96921, and 96922 were established in 2002. When the codes were resurveyed in April 2023, no descriptor revisions were made, as the available 2021 Medicare claims data indicated that the typical patient was being treated for psoriasis (96920, psoriasis = 79.3 percent).\18\ Additionally, there have been numerous CPT Editorial Panel applications and actions since the withdrawn application at the September 2022 meeting,\19\ including a February 2025 action.\20\ However, at the time of drafting this proposed rule, the request for expanded indications does not appear to have been re-submitted or revisited by the specialty societies. We are seeking comments on whether creating a new HCPCS G-code that is not condition-specific would improve payment accuracy for this technology when used to treat conditions other than psoriasis. We are also seeking information regarding possible barriers to coding changes undertaken through the CPT Editorial Panel process. We are seeking information regarding the nominator's assertion that equipment items EQ154 and EQ155 are necessary and typical for these services, and invoices to support the nominator's asserted purchase prices, so as to provide a comprehensive understanding of the overall costs associated with these services. We note that, effective for January 1, 2027, based on the publicly available Summary of CPT Editorial Panel Actions from the February 2025 meeting,\21\ the codes' descriptors will change from ``Excimer laser treatment for psoriasis'' to ``Laser treatment for psoriasis,'' absent subsequent CPT Editorial Panel actions. Therefore, we believe it is important for comments to support the typicality of these equipment items regardless of the type of laser used for these services. --------------------------------------------------------------------------- \18\ https://www.ama-assn.org/system/files/ap-2023-ruc-meeting-minutes.pdf. \19\ https://www.ama-assn.org/system/files/september-2022-cpt-summary-panel-actions.pdf. \20\ https://www.ama-assn.org/system/files/feb-2025-summary-of-panel-actions.pdf. \21\ https://www.ama-assn.org/system/files/feb-2025-summary-of-panel-actions.pdf. --------------------------------------------------------------------------- (5) Optical coherence tomography (OCT) of retina (CPT code 0605T). CPT code 0605T (Optical coherence tomography (OCT) of retina, remote, patient-initiated image capture and transmission to a remote surveillance center, unilateral or bilateral; remote surveillance center technical support, data analyses and reports, with a minimum of 8 daily recordings, each 30 days) was submitted as potentially misvalued. This code is a temporary CPT category III code and is assigned procedure status ``C'' (contractor priced) under the PFS. The nominator generally expressed concern that the initial pricing by the contractor was inaccurate and did not appropriately consider the cost of the OCT device when provided by the independent diagnostic testing facility (IDTF). The nominator requested that CMS revise the valuation of this code to properly account for the cost of the OCT imaging device used to provide this remote diagnostic retinal monitoring service. The nominator stated that remote OCT allows for better management of patients with neovascular age-related macular degeneration (NV-AMD) and improved management has been shown to result in reduction in treatments.\22\ \23\ According to the nominator, one of the Medicare Administrative Contractors who priced the service did not [[Page 32382]] appropriately consider the cost of the OCT device provided by the IDTF, resulting in an inadequate payment rate that did not cover the direct operating costs. The nominator asserted that this code is misvalued because the contractor established its value by crosswalking to the valuation for remote physiological monitoring (RPM) CPT code 99454 (Remote monitoring of physiologic parameter(s) (eg, weight, blood pressure, pulse oximetry, respiratory flow rate), initial; device(s) supply with daily recording(s) or programmed alert(s) transmission, each 30 days). The nominator stated that CPT code 99454 represents a distinct type of service and falls under a different benefit category than remote OCT. The nominator asserted that while remote OCT is a diagnostic service that is provided by an IDTF, CPT code 99454 is an E/ M service that is not permitted to be furnished by IDTFs. In addition, the device used to furnish remote OCT performs retinal imaging comparable to that performed in the physician office, has a useful life of 5 years, and costs $40,000. The nominator provided an invoice to support this claim. In contrast, the nominator indicated that the device used in the service described by CPT code 99454 captures simple physiologic data and costs $1,000. The nominator provided a device equipment cost per month of $666.67 for the device used to furnish remote OCT. Using the device cost calculation, the nominator estimated an unadjusted rate of $632.22 by following CMS' valuation methodology. --------------------------------------------------------------------------- \22\ Holekamp, Nancy M., et al. ``Prospective trial of Home OCT guided management of treatment experienced nAMD patients.'' RETINA (2022): 10-1097. \23\ Heier, Jeffrey S., et al. ``Clinical Use of Home OCT Data to Manage Neovascular Age-Related Macular Degeneration.'' Journal of VitreoRetinal Diseases (2024): 24741264241302858. --------------------------------------------------------------------------- Overall, the nominator stated that CPT code 99454 is not an accurate crosswalk for remote OCT and recommended that CMS revise the valuation of CPT code 0605T to properly account for the higher cost of the OCT imaging device used to provide this remote diagnostic retinal monitoring service. The nominator stated that due to the current undervaluation, the prescribing physicians and their patients in need of remote monitoring of a treatable sight-threatening retinal disease do not have access to this service. We are not proposing CPT code 0605T as potentially misvalued at this time. We note that the nominator submitted a single invoice in support of its assertions, which may not be reflective of typical costs, and we encourage interested parties to provide additional information. including invoices for the OCT devices. Also, we welcome comments on whether this code should be nationally priced and what inputs should be used if we were to set a national rate for this service. (6) Mechanical separation of plasma from blood (CPT code 36514). An interested party nominated CPT code 36514 (Therapeutic apheresis; for plasma pheresis) as potentially misvalued for two PE- related reasons. The first concern involves the assigned clinical labor code, L056A (RN/OCN), which the nominator states undervalues the therapeutic apheresis nurse's operating wage cost. The second concern relates to the equipment code, EQ084 (cell separator system), specifically its price and equipment utilization rate. The nominator presented differences in therapeutic plasmapheresis or plasma exchange (TPE) procedure payments between settings, with 50 percent to 75 percent of the 100,000 annual TPE procedures occurring in hospital outpatient settings. The nominator stated that the payment differential is substantial: under the Hospital OPPS, the average CY 2025 Medicare payment rate for TPE performed in a hospital outpatient department is $1,639.28, excluding compensation for the supervising physician. In contrast, under the PFS, the average CY 2025 Medicare payment rate for the same procedure performed in a non-facility setting is $663.43. According to the nominator, the differences in payment rates have forced patients to receive treatment in more expensive hospital outpatient settings, as physicians cannot financially sustain the costs of performing TPE services in non-facility settings under the current payment rates. The nominator asserted that this payment structure not only limits patient access to care but also results in higher overall costs to the Medicare program, as procedures are channeled to the more expensive hospital outpatient setting where payment rates are nearly 2.5 times higher than non-facility rates. The nominator stated that TPE is a complex extracorporeal blood therapy procedure used to treat patients with serious hematological, oncologic, neurological, rheumatologic, cardiac and autoimmune disorders. Therapeutic apheresis nurses performing this procedure require extensive specialized training to independently handle patients with a wide spectrum of serious illnesses and comorbidities. They must be trained and highly skilled in evaluating patients and managing clinical issues and adverse events that commonly arise during the procedure, particularly in patients with comorbid anemia, renal failure, cardiovascular disease, serum protein abnormalities or other risk factors.\24\ Their key responsibilities include advanced vascular access, continuous management of the extracorporeal circuit, troubleshooting, patient assessment to manage adverse events, and medication administration. The nominator emphasized that therapeutic apheresis nurses' training and skill level are distinct from nurses collecting blood products from healthy donors. --------------------------------------------------------------------------- \24\ Chhibber V and King KE. Management of the therapeutic apheresis patient (Chapter 12). In: Apheresis: Principles and Practice, 3rd Edition. Bethesda, MD: AABB Press, 2010. --------------------------------------------------------------------------- The nominator summarized the wide range of median annual and hourly base salaries ($92,525 to nearly $125,000) for ``Apheresis Nurse'' or ``Apheresis RN'' positions identified across four leading online employment recruiting firms. According to the nominator, this variability likely stems from the differing mixes of higher-paid therapeutic apheresis nurse job postings versus lower-paid postings for nurses collecting blood products from healthy donors at community blood centers across these firms. Based on the listed position openings, the nominator found that the rate per minute for a therapeutic apheresis nurse, inclusive of benefits, likely ranges between $1.30 and $1.50 per minute, well over 60 percent higher than the $0.81 per minute valuation currently assigned to CPT code 36514 with the L056A labor code. Also, the nominator claimed that in order to accurately assess therapeutic apheresis nurse wages, other surveys could be employed focusing on nurses performing therapeutic procedures while excluding those working in blood/plasma collection centers from healthy volunteer donors, as the latter typically receive lower compensation despite using similar equipment. The nominator proposes that CMS collaborate with the Department of Labor (DOL) to accurately assess therapeutic apheresis nurse salaries and establish a new clinical labor code with appropriate per-minute rates. This would replace the current L056A labor code used for CPT code 36514, which the nominator asserts undervalues these specialized nurses' wages and benefits. The new code would specifically exclude non-patient-facing nurses who perform blood product collection, ensuring more accurate compensation for this specialized role. According to the nominator, the current Medicare payment rate for CPT code 36514 in the non-facility setting fails to adequately account for direct PE costs. First, based on fourth quarter 2024 U.S. sales data, the nominator [[Page 32383]] requested updating the CMS Equipment File price for the cell separator system equipment code (EQ084) from $81,656.40 to $93,321.35, reflecting current market conditions. According to the nominator, the current rate of 0.5 for equipment code EQ084 implies that facilities perform 426 procedures per year per device; however, data from major hospitals, including the three largest-volume hospitals in the U.S., demonstrates that facilities average only 181 procedures per year per device, suggesting a more accurate utilization rate of 0.21. This discrepancy can significantly impact on the calculated costs and subsequent payment rates for equipment code EQ084. After reviewing the nominator's submission, we do not believe that we have enough information to evaluate whether CPT code 36514 is potentially misvalued, and thus we are not proposing the code as potentially misvalued at this time. To assist us in further considering whether CPT code 36514 is potentially misvalued, we are seeking information on the direct practice expense inputs, particularly regarding the clinical labor code L056A and equipment code EQ084. Specifically, we seek comments on whether to establish a new therapeutic apheresis nurse clinical labor code in the non-facility setting. Also, we seek invoices and other associated information that could be used to update to the cell separator system equipment code EQ084 to reflect current market costs. We do not believe an update to the equipment utilization rate is necessary. We disagree with the nominator that an equipment utilization rate of 21 percent would be typical for the cell separator system. As we stated previously, 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. As we discussed in the CY 2021 PFS final rule, it would distort relativity to assign a utilization rate of 21 percent for the cell separator system equipment, as this would have the same effect as doubling the overall price of the equipment (85 FR 84629). (7) Remote interrogation device evaluation (CPT code 93296). An interested party nominated CPT code 93296 (Interrogation device evaluation(s) (remote), up to 90 days; single, dual, or multiple lead pacemaker system, leadless pacemaker system, or implantable defibrillator system, remote data acquisition(s), receipt of transmissions and technician review, technical support and distribution of results) as potentially misvalued, because the service has experienced substantial changes in PE. The nominator emphasized that the current direct practice expense inputs do not accurately represent either the current standard of care or the actual resources required to provide the service, necessitating an urgent review of the code's resource input valuations. CPT code 93296 is a technical component-only code describing remote monitoring of cardiac devices over 90 days. The nominator stated that this service enables healthcare providers to remotely evaluate implanted cardiac defibrillators and pacemakers, review device data, communicate with patients, and share findings with physicians. The monitoring helps prevent emergencies and reduces hospitalizations through early intervention and timely device adjustments. According to the nominator, the code's direct costs, last reviewed by RUC in 2016 and implemented in 2018, no longer reflect current service delivery requirements because technological advancements and expanded monitoring protocols have significantly increased service complexity and resource requirements. According to the nominator, the service delivery for CPT code 93296 has evolved significantly, requiring enhanced organizational infrastructure and specialized clinical expertise. Modern service delivery involves complex data management, with each transmission requiring 32 distinct tasks \25\ for complete patient care. The increased service complexity stems from advanced technology requirements, expanded patient monitoring needs, and more frequent device interrogation, shifting from quarterly to more regular intervals. These changes have created a notable disparity between current resource costs and existing valuations, necessitating updated mechanisms for data management and prioritization. --------------------------------------------------------------------------- \25\ Aileen M. Ferrick et al,. 2023 HRS/EHRA/APHRS/LAHRS Expert Consensus Statement on Practical Management of the Remote Device Clinic (2023), http://www.hrsonline.org/guideance/clinical-resources/2023-hrsehraaphrslahrs-expert-consensus-statement-practical-management-remote-device-clinic?gad_source=1&gclid=Cj0KCQiAkoe9BhDYARIsAH85cDOusU-vRRcEnwoXzUmN2COkX0_DiRVHuOM8cYMf8riBNXW-KrFagnAaAs5NEALw_wcB. --------------------------------------------------------------------------- According to the nominator, the direct cost inputs for clinical labor and equipment do not reflect the current direct costs required to furnish the services. The nominator stated that the total direct cost of $25.84 (including clinical labor and equipment) exceeds the CY 2025 national non-facility PFS payment rate of $19.41. They stated that the current valuations do not reflect modern clinical staffing needs and equipment requirements for this pacemaker interrogation system service, despite similar updates being approved for comparable diagnostic services. To assess resource requirements, the nominator conducted an independent study among IDTFs, using standardized data collection and a volume-weighted analysis of 2023 service data. The nominator claimed that their findings demonstrate a significant disparity between current valuations and actual service delivery costs, supporting the need for comprehensive input review. The study of IDTFs conducted by the nominator revealed that CPT code 93296 requires 83.66 minutes of non-physician clinical labor time, significantly more than CMS' current value of 28 minutes. This time encompasses eleven distinct tasks, from patient enrollment to quality assurance, with the most time-intensive activities being data review and analysis (25.25 minutes) and unscheduled alert management (21.84 minutes). [[Page 32384]] [GRAPHIC] [TIFF OMITTED] TP16JY25.012 Furthermore, the nominator stated that while the valuation for CPT code 93296 is currently based on electrodiagnostic technologists (L037A) at $0.44 per minute, the service is typically performed by cardiovascular technicians (L038B), who receive $0.60 per minute. Thus, the nominator believes that updating both the time and clinical staff classification is needed for accurate service valuation and consistency with other implantable device monitoring services. Finally, the nominator requested two updates to the equipment costs for CPT code 93296. First, they recommended adjusting the equipment usage time to align with the updated clinical labor time for remote interrogation device evaluation. Second, they recommended changing the assigned equipment code from ``pacemaker interrogation, system'' (EQ320) priced at $123,250 to ``pacemaker follow-up system'' (EQ198) priced at $279,453. We note that no invoices were submitted to support these prices. The nominator believes that these changes would align the equipment valuation with actual costs and match similar CMS-approved device monitoring services. Overall, the nominator stated that a review of CPT code 93296 current inputs reveals significant undervaluation in several key areas. According to the nominator, the existing resource costs for clinical labor times, labor types, and equipment costs do not adequately reflect the current service requirements. Based on the submitted information, however, we are not currently proposing to nominate this code as potentially misvalued. We request that the nominator submit a complete report detailing associated direct practice expense input assessment data to enable us to more fully consider whether the code is potentially misvalued. Additionally, we welcome comments, including any analysis or studies from the broader medical community, including the RUC, regarding whether this service has experienced substantial changes in practice expenses since its last review. (8) Fine Needle Aspiration (FNA) (CPT codes 10021, 10004, 10005, 10006) An interested party requested that CMS reconsider CPT codes 10021 (Fine needle aspiration biopsy, without imaging guidance; first lesion), 10004 (Fine needle aspiration biopsy, without imaging guidance; each additional lesion), 10005 (Fine needle aspiration biopsy, including ultrasound guidance; first lesion) and 10006 (Fine needle aspiration biopsy, including ultrasound guidance; each additional lesion) for nomination as potentially misvalued, citing significant undervaluation since 2019. The nominator submitted a request to CMS for the reevaluation of these codes, stating that the payment changes have created a concerning cascade of negative consequences impacting the care of patients with thyroid nodules and cancer. Specifically, the nominator questions the fundamental basis of CMS' 2019 work RVU reductions for FNA procedures. While the RUC recommended work RVUs of 1.20 for CPT code 10021 and 1.63 for CPT code 10005, CMS instead implemented lower values of 1.03 and 1.46, respectively. The nominator strongly disagreed with CMS' methodology, particularly its comparison to CPT code 36440 (neonatal blood transfusion). The nominator argued that this crosswalk comparison is inappropriate because the neonatal procedure represents a fundamentally different type of service with distinct work intensity levels, requires different expertise, is rarely billed to Medicare, and serves an entirely different patient population than FNA procedures. The nominator further emphasized that when the work RVU for CPT code 10005 was reduced by 10.5 percent [[Page 32385]] (from 1.94 to 1.46), it triggered a much larger 35.7 percent drop in payment. This substantial decrease has forced a significant shift in where these procedures are performed, moving from office-based settings to hospital facilities. Using claims data, the nominator stated that there has been a shift in the site of service for FNA procedures between 2018 and 2023; the percentage of procedures performed in facility settings increased from 52.06 percent in 2018 to 57.05 percent in 2023. Conversely, services performed in office settings declined from 47.05 percent in 2018 to 42.40 percent in 2023. The nominator claimed that this shift in performance of FNA from the office setting to hospital outpatient departments resulted in Medicare paying 524 percent more for the same procedure. With an additional cost of $584.92 per procedure at facility locations, the nominator claimed that this shift has resulted in increased Medicare expenses of $4.17 million. Beyond the financial implications, the nominator stated that the low valuation of this code family has resulted in a shift to facility settings raising Medicare costs, reducing access, and reducing quality of care. According to the nominator, most concerning is the long-term impact on medical education, as new endocrinologists and surgeons are now avoiding learning FNA procedures altogether. Furthermore, the nominator referenced a study,\26\ which discusses the potentially negative consequences of code devaluation on patient care and healthcare spending. Overall, to address these issues, the nominator specifically requested that CMS restore the work RVU values to those originally recommended by the RUC in 2019, stating that CMS' previous crosswalk to neonatal transfusion described by CPT code 36440 (Push transfusion, blood, 2 years or younger) was inappropriate given the significant differences in work intensity levels and required expertise between the procedures. --------------------------------------------------------------------------- \26\ THYROID Volume 34 Number 11, 2024 https://doi.org/10.1089/thy.2024.0442 Eldeiry, et al. ``Impact of Changes in Fine Needle Aspiration Biopsy Reimbursement on Clinical Care of Patients with Thyroid Nodules in the United States''. --------------------------------------------------------------------------- We appreciate the comprehensive information provided by the nominator, including their reference to recent research and detailed trend analysis. However, we note that these codes have undergone multiple recent reviews. Our review of these codes and our rationale for finalizing the current values are extensively discussed in the CY 2019 PFS final rule (83 FR 59517) and CY 2021 PFS final rule (85 FR 84599). Furthermore, this code family was previously nominated two times as potentially misvalued and discussed in the CY 2020 PFS final rule (84 FR 62625) and CY 2025 PFS final rule (89 FR 97743). For more information, we encourage the nominator to reference the discussions in previous rulemaking. We maintain our position and are not proposing this code family as potentially misvalued. We acknowledge the shift in site of service for FNA procedures between 2018 and 2023. While we do not currently consider these changes substantial enough to warrant immediate revaluation, we will continue to monitor the site-of-service trends closely. Should these patterns persist or accelerate, a new survey in the future may be necessary to accurately reflect these changes in practice patterns. We welcome public comments and recommendations, including those from the RUC, regarding whether these codes should be re-reviewed in light of the information submitted by the nominator. (9) Nasal Sinus Irrigation (CPT Codes 31000 and 31002) An interested party nominated CPT codes 31000 (Lavage by cannulation; maxillary sinus (antrum puncture or natural ostium)), and 31002 (Lavage by cannulation; sphenoid sinus) as potentially misvalued. The interested party expressed concern that these codes are undervalued due to missing pricing data for essential lavage supplies and stated that they are not currently priced in the non-facility setting. Regarding both codes, the interested party identified two issues. They stated that this procedure uses the Cyclone[supreg] sinonasal suction and irrigation system, and requires additional tools, staff time and supplies. For CPT code 31000, the interested party stated that while the current PE supplies are valued at $33.68, this amount should be $333.68, reflecting a $300 increase to include the Cyclone device cost. Similarly, for CPT code 31002, the interested party proposed increasing the supply price from $26.74 to $326.74 to incorporate the Cyclone device cost. To support this claim, the interested party has provided seven paid invoices demonstrating the actual cost of the system. The interested party also claimed that both codes do not have non- facility RVUs, but are primarily performed in non-facility settings. According to the AMA's RUC database's procedure volume data, CPT code 31002 is performed in the non-facility setting 81.4 percent of the time and CPT code 31000 is reported 77.2 percent of the time in the non- facility setting.\27\ --------------------------------------------------------------------------- \27\ AMA RBRVS DataManager. American Medical Association. (2025, January 15). https://www.ama-assn.org/. --------------------------------------------------------------------------- The interested party emphasized that these misvaluations have real- world implications for patient care. The current valuations may limit physicians' ability to provide these services in both facility and non- facility settings, potentially affecting patient access to care, particularly for those who can only receive treatment in physician offices. Thus, the interested party requested a revaluation of the PE components for both codes and the establishment of non-facility PE inputs for these services. Although we are not currently proposing to designate these codes as potentially misvalued, we acknowledge the interested party's concerns about their current valuation. Specifically, these concerns could stem from missing pricing data and observed changes in the typical site of service and dominant specialty since the last valuation. We note that CPT code 31000 is typically performed in the non-facility setting but question whether the Cyclone device is either typically used or necessary for the performance of this procedure. We note that CPT code 31002 does not have non-facility PE inputs, however it seems to typically be performed in the office setting with the dominant specialty listed as Allergy/Immunology and not Otolaryngology. We also question whether the Cyclone device is either typically used or necessary for the performance of this procedure. We believe that both codes would require a comprehensive review to address these potential changes in typical site of service and dominant specialty, as well as PE valuation. We welcome public comments regarding these issues concerning CPT codes 31000 and 31002. Interested parties are encouraged to submit relevant documentation, such as invoices or other evidence that demonstrates the typical resource costs for providing these services. (10) Portable X-Ray Services (HCPCS Codes R0070, R0075) In the CY 2025 PFS final rule, we acknowledged that several portable x-ray (PXR) suppliers and trade organizations continue to express longstanding concerns with how payment is established for transportation services related to PXR as described by HCPCS codes R0070 and R0075 (89 FR 97809). We also noted interested parties' request for greater consistency in the pricing of these services (89 FR 97809 through 97810). [[Page 32386]] We suggested that interested parties may best engage with the MACs on these issues by appropriately reporting cost data in the MAC requested format. We also recognized that we should maintain consistency in pricing these services that are more indicative of changes in costs that occur yearly. In this proposed rule, we are seeking comments on whether we should assign national pricing under the PFS for PXR transportation services; specifically, for HCPCS code R0070 (Transportation of portable x-ray equipment and personnel to home or nursing home, per trip to facility or location, one patient seen) and HCPCS code R0075 (Transportation of portable x-ray equipment and personnel to home or nursing home, per trip to facility or location, more than one patient seen). We believe that national pricing would be conducive to ensuring consistency in payment rates across localities and also create payment stability for these services. To nationally price HCPCS codes R0070 and R0075, we could use reference codes that have only PE values and no work RVUs because these codes describe only the transportation services associated with PXR. Since these codes are currently paid using contractor pricing, we could also analyze the average MAC payment for them to inform national pricing. For example, we observed that HCPCS code R0070 was priced between $215 to 230 per service while HCPCS code R0075 was priced between $80 to 90 per service. Using these valuations could help to inform us of potential crosswalk codes in order to maintain consistency with the rates currently being paid. By converting the dollar payment for HCPCS codes R0070 and R0075 from Medicare Part B claims data into RVUs through the usage of our current conversion factor under the PFS, we identified potential crosswalk codes. For HCPCS code R0070, we could use a crosswalk to CPT code 93243 (External electrocardiographic recording for more than 48 hours up to 7 days by continuous rhythm recording and storage; scanning analysis with report), which has a total national non-facility payment rate of $226.43 for CY 2025, and for HCPCS code R0075, we could use a crosswalk to CPT code 92582 (Conditioning play audiometry), which has a total national non-facility payment rate of $86.69 for CY 2025. We welcome comments from the public on whether we should consider national pricing for HCPCS codes R0070 and R0075, as well as whether these potential crosswalk codes would appropriately value these services, and any other factors we should consider. (11) Cryoablation Therapy To Treat Postoperative Pain An interested party requested we establish a code to describe the additional intraoperative time required by the surgeon to perform adjunctive cryoablation therapy for postoperative pain management. According to the interested party, intraoperative cryoablation therapy is performed as a supplemental procedure alongside primary surgical procedures to provide postoperative pain relief for up to 60 days. The therapy works by freezing nerves near the surgical site without causing permanent damage, temporarily blocking pain signals during the patient's recovery period. The interested party stated that this procedure requires an additional 20-30 minutes of intraoperative time for the surgeon beyond the primary surgical procedure. The interested party referenced clinical evidence highlighting the use of intraoperative cryoablation to reduce the need for opioids in postsurgical patients, as well as recent guideline recommendations.28 29 --------------------------------------------------------------------------- \28\ Miller DL, Hutchins J, Ferguson MA, Barhoush Y, Achter E, Kuckelman JP. Intercostal Nerve Cryoablation During Lobectomy for Postsurgical Pain: A Safe and Cost-Effective Intervention. Pain Ther. 2025 Feb;14(1):317-328. doi: 10.1007/s40122-024-00694-3. \29\ Dunning J, Burdett C, Child A, Davies C, Eastwood D, Goodacre T, Haecker FM, Kendall S, Kolvekar S, MacMahon L, Marven S, Murray S, Naidu B, Pandya B, Redmond K, Coonar A. The pectus care guidelines: best practice consensus guidelines from the joint specialist societies SCTS/MF/CWIG/BOA/BAPS for the treatment of patients with pectus abnormalities. Eur J Cardiothorac Surg. 2024 66(1):ezae166. --------------------------------------------------------------------------- Currently, there is no specific code to account for the additional physician work associated with intraoperative cryoablation therapy. According to the nomination letter, we included the Cryo Nerve Block Therapy (CryoNB) on the list of devices eligible for temporary additional payments under the Non-Opioids Prevent Addiction in the Nation (NOPAIN) Act \30\ in the CY 2025 OPPS final rule (89 FR 94353 through 94354). However, the interested party stated barriers still exist for physician adoption mainly because there is currently no code to account for the 20-30 additional minutes of physician work associated with the intraoperative administration and delivery of cryoablation therapy. --------------------------------------------------------------------------- \30\ CY 2025 OPPS Final Rule, 89 Fed. Reg. 93912, 94354 (Nov. 27, 2024) (CMS specifically affirmed that ``the CryoNB System meets the statutory requirements and should be paid separately under this provision.'') --------------------------------------------------------------------------- Also, the interested party stated that many practitioners incorrectly interpret Medicare's anesthesia rules as prohibiting payment for extra professional services when the same surgeon provides ancillary cryoablation therapy.\31\ According to the nominator, while CMS typically do not allow separate payments for anesthesia services when the same physician performs both the surgical procedure and anesthesia, this limitation does not apply to cryoablation therapy for postoperative pain management.\32\ However, according to the interested party, ongoing confusion regarding this policy's application creates an unnecessary barrier to cryoablation procedures that could reduce or replace opioid use for Medicare beneficiaries. --------------------------------------------------------------------------- \31\ See Medicare NCCI 2024 Coding Policy Manual, Chapter 13, pgs. 6-7 (revised Jan. 1, 2025), available at: https://www.cms.gov/files/document/13-chapter13-ncci-medicare-policy-manual-2025finalcleanpdf.pdf. \32\ AHA Coding Clinic[supreg], Q3 2024 vol. 11, no. 3 (effective with discharges Aug. 1, 2024). --------------------------------------------------------------------------- The interested party stated that establishment of a G-code for physician work associated with intraoperative cryoablation therapy for postoperative pain would facilitate greater access for patients who require or prefer non-opioid alternatives for pain relief. The interested party further stated that such a G-code would help promote patient access to this alternative to opioids by clarifying that Medicare anesthesia rules do not apply to cryoablation for postoperative pain when furnished by the same surgeon. We are seeking public comments on whether a new G-code is needed to account for the additional intraoperative time required to perform cryoablation therapy, including service elements and valuation of work and practice expense, including potential crosswalk codes.

D. Payment for Medicare Telehealth Services Under Section 1834(m) of

the Act As discussed in prior rulemaking, several conditions must be met for Medicare to make payment for telehealth services under the PFS. See further details and full discussion of the scope of Medicare telehealth services in the CY 2018 PFS final rule (82 FR 53006), the CY 2021 PFS final rule (85 FR 84502), and the CY 2024 PFS final rule (88 FR 78861 through 78866) and in 42 CFR 410.78 and 414.65.

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

the Act a. Changes to the Medicare Telehealth Services List In the CY 2003 PFS final rule with comment period (67 FR 79988), we established a regulatory process for adding services to or deleting services [[Page 32387]] from the Medicare Telehealth Services List in accordance with section 1834(m)(4)(F)(ii) of the Act (42 CFR 410.78(f)). This process provides the public with an ongoing opportunity to submit requests for adding services, which are then reviewed and assigned to categories established through notice and comment rulemaking. Under the process we established beginning in CY 2003, we evaluated whether a service should be assigned to the Medicare Telehealth Services List and designated as Category 1: Services similar to professional consultations, office visits, and office psychiatry services currently on the Medicare Telehealth Services List or Category 2: Services that were not similar to those on the current Medicare Telehealth Services List. In the CY 2021 PFS final rule (85 FR 84507), we created a third category of criteria for adding services to the Medicare Telehealth Services List on a temporary basis following the end of the PHE for the COVID-19 pandemic. This new category described services that were added to the Medicare Telehealth Services List during the PHE, for which there was likely to be clinical benefit when furnished via telehealth, but there was not yet sufficient evidence available to consider the services for permanent addition under the Category 1 or Category 2 criteria. Services added on a temporary, Category 3 basis ultimately needed to meet the criteria under Category 1 or 2 to be permanently added to the Medicare Telehealth Services List. To add specific services on a Category 3 basis, we would conduct a clinical assessment to identify those services for which we could foresee a reasonable potential likelihood of clinical benefit when furnished via telehealth. In the CY 2024 PFS final rule (88 FR 78861 through 78866), we consolidated these three categories and implemented a revised 5-step process for making additions, deletions, and changes to the Medicare Telehealth Services List (5-step process), beginning for the CY 2025 Medicare Telehealth Services List. The 5-step process review criteria are set forth in the CY 2024 PFS final rule (88 FR 78861 through 78866), includes the following steps: (1) Determine whether the service is separately payable under the PFS; (2) Determine whether the service is subject to the provisions of section 1834(m) of the Act; (3) Review the elements of the service as described by the HCPCS code and determine whether each of them is capable of being furnished using an interactive telecommunications system as defined in Sec. 410.78(a)(3); (4) Consider whether the service elements of the requested service map to the service elements of a service on the list that has a permanent status described in previous final rulemaking; and (5) Consider whether there is evidence of clinical benefit analogous to the clinical benefit of the in-person service when the patient, who is located at a telehealth originating site, receives a service furnished by a physician or practitioner located at a distant site using an interactive telecommunications system. Rather than categorizing a service as ``Category 1'', ``Category 2,'' or ``Category 3,'' each service is now assigned a ``permanent'' or ``provisional'' status. A service is assigned a ``provisional'' status if it meets steps 1, 2, and 3 of our review process, and, if while there is not enough evidence to demonstrate that the service is of clinical benefit, there is enough evidence to suggest that further study may demonstrate such benefit. b. Proposal To Modify the Medicare Telehealth Services List and Review Process Section 1834(m)(4)(F)(ii) of the Act requires that the Secretary establish a process that provides, on an annual basis, for the addition or deletion of services to the definition of telehealth services for which payment can be made when furnished via telehealth under the conditions specified in section 1834(m) of the Act. As specified at Sec. [thinsp]410.78(f), except for a temporary policy that was limited to the PHE for COVID-19, we make changes to the list of Medicare telehealth services through the annual PFS rulemaking process. Our current 5-step review process reflects the stepwise method by which we consider requests to add services to, remove services from, or change the status of, services on the Medicare Telehealth Services List, beginning with the CY 2025 Medicare Telehealth Services List (88 FR 78861 through 78871). We are proposing, beginning for the CY 2026 Medicare Telehealth Services List, to revise the 5-step review process for reviewing requests to the Medicare Telehealth Services List. Based on feedback from interested parties, we believe that we need to simplify our telehealth list review process by focusing our review on whether the service can be furnished using an interactive telecommunications system. The current 5-step review process has proven to be unclear for requestors. Interested parties, including requestors, have emphasized that it is difficult to ascertain the level of clinical evidence needed for a service with a provisional designation to be redesignated permanent. Additionally, for new services or services with low utilization, interested parties have had a difficult time providing peer-reviewed evidence applicable to the service and/or the Medicare beneficiary patient population. Lastly, based on feedback from interested parties and our own internal review, the 5-step process insufficiently accounts for the vital role of professional judgment exercised by physicians and other practitioners. We continue to believe that physicians and other practitioners, given their in-depth knowledge of their beneficiaries' clinical needs, are best positioned to exercise their professional judgment in determining whether a service can be safely furnished via telehealth and whether furnishing a service via telehealth will provide clinical benefit justifying its use. We therefore are proposing to remove Step 4 (Consider whether the service elements of the requested service map to the service elements of services on the list that has a permanent status described in previous final rulemaking) and Step 5 (Consider whether there is evidence of clinical benefit analogous to the clinical benefit of the in-person service when the patient, who is located at a telehealth originating site, receives a service furnished by a physician or practitioner located at a distant site using an interactive telecommunications system) from our review criteria and retain Steps 1 through 3 (detailed below). Under this proposal, services on the Medicare Telehealth Services List would no longer be designated ``permanent'' or ``provisional''. All services listed or added on the Medicare Telehealth Services List would be considered included on a permanent basis. Note, CMS would still reserve the right to remove services included on the Medicare Telehealth Services List based on internal review or feedback received from interested parties in accordance with section 1834(m)(4)(F)(ii) of the Act (42 CFR 410.78(f)). If finalized, all codes currently on the list (provisional or permanent) will remain on the Medicare Telehealth Services List. Because CMS has already determined that services with a ``provisional'' designation satisfy the standards represented in Steps 1 through 3 in prior rulemaking cycles, we do not believe further review would be required to justify their inclusion on the Medicare Telehealth Services List under the revised process. We continue to request information from interested parties about service(s) that may be appropriate for addition to or deletion from the list of Medicare telehealth services and their effects on beneficiary access, safety, and quality of care. [[Page 32388]] We are proposing to retain Steps 1 through 3 and eliminate Steps 4 through 5 because we believe that the standards represented in Steps 1 through 3 alone are sufficient guardrails to ensure that only services separately payable under the PFS, subject to the provisions of section 1834(m) of the Act, and capable of being furnished using an interactive telecommunications system are considered Medicare telehealth services. For additional information, these steps are further discussed in the CY 2024 PFS final rule (88 FR 78861 through 78866). We do not believe Steps 4 through 5 are necessary, because as discussed above, we believe the complex professional judgment of the physician or practitioner is sufficient to ensure a service can be safely furnished via telehealth and that the service will be clinically beneficial to the beneficiary. We believe that the determination to utilize the complex professional judgment of the physician or practitioner will better allow practitioners to determine if telehealth is appropriate for that specific Medicare beneficiary and that specific clinical scenario. We expect that physicians and other practitioners would consider the entirety of the circumstances, including the clinical profile and needs of the beneficiary, to determine the appropriate modality for furnishing the service. This specification is similar to the requirements set forth for the process by which CMS updates the list of covered surgical procedures in Medicare when furnished within an ambulatory surgical center (ASC) (also called the ASC covered procedures list (CPL)), which were established in the 2021 OPPS Final Rule (85 FR 86148 through 86149). In addition, this specification is similar to our policy regarding the in-person visit requirements for telehealth behavioral health services (``. . . the practitioner is not precluded from scheduling in-person visits at a more frequent interval, should such visit be determined to be clinically appropriate or preferred by the patient'' (86 FR 65057)) and for audio-only telehealth services (``practitioners should always use their clinical judgment in deciding to furnish services via telehealth, including in the patient's home, to ensure that appropriate care is being delivered; including scheduling in-person care as needed'' (89 FR 97761)). We strive to balance the goals of increasing practitioner and patient choice of service modality with the consideration of patient safety for all Medicare beneficiaries. Notably, the addition of a service to the Medicare Telehealth Services List does not mean that it is appropriate to be furnished via telehealth to every Medicare beneficiary in every clinical scenario--as always, the physician or practitioner should use his or her complex professional judgment to determine the appropriate service modality on a case-by-case basis. As technology advances and more services may be safely furnished via telehealth and paid under the PFS, it is increasingly important for physicians or practitioners to exercise their professional judgment in determining the generally appropriate service modality for their patients to receive a service. We believe our proposal to remove steps 4 through 5 of the 5-step review process would expand and build upon our intent to simplify and reduce the administrative burden of submission and review of services to the Medicare Telehealth Services List. We believe our proposed policy would allow patients and physicians or practitioners to determine the most appropriate service modality for an individual patient while continuing to ensure patient safety. As discussed above, physicians and other practitioners are best positioned to make patient- specific service modality determinations. Physicians and other practitioners have the greatest familiarity with and understanding of the needs of their individual patients and will use their complex professional judgment to determine whether a service can be safely furnished via telehealth, given their patients' clinical profiles and needs, among other essential considerations. We believe physicians and other practitioners would consider important safety factors when determining the appropriate service modality for their specific beneficiaries. We continue to encourage the review and use of clinical practice guidelines, peer-reviewed literature, and similar materials that illustrate the typical setting of care, population of beneficiaries, and clinical scenarios that practitioners would encounter when furnishing the Medicare Telehealth service using only interactive, two-way audio-video communications technology or two-way, real-time audio-only communication technology for services furnished to a patient in their home, as permitted in accordance with 42 CFR 410.78(a)(3). We are proposing to refine the regulatory process for adding services to or deleting services from the Medicare Telehealth Services List by removing Steps 4 and 5 and maintaining the current Steps 1 through 3. The steps are listed in detail below: Step 1. Determine whether the service is separately payable under the PFS. When considering whether to add, remove, or change the status of a service on the Medicare Telehealth Services List, we first determine whether the service, as described by the individual HCPCS code, is separately payable under the PFS because, as further discussed in CY 2024 PFS final rule (88 FR 78861 through 78866), Medicare telehealth services are limited to those services for which separate Medicare payments can be made under the PFS. Before gathering evidence and preparing to submit a request to add a service to the Medicare Telehealth Services List, the submitter should therefore first check the payment status for a given service and ensure that the service (as identified by a HCPCS code), is a covered and separately payable service under the PFS (as identified by payment status indicators A, C, T, or R on our public use files). Step 2. Determine whether the service is subject to the provisions of section 1834(m) of the Act. If we determine at Step 1 that a service is separately payable under the PFS, we apply Step 2 under which we determine whether the service at issue is subject to the provisions of section 1834(m) of the Act. Section 1834(m) of the Act provides for payment to a physician or other practitioner for a service furnished via an interactive telecommunications system, notwithstanding that the furnishing physician or practitioner and patient are not in the same location, at the same amount that would have been paid if the service was furnished without the telecommunications system. We have historically interpreted this to mean that only services that are ordinarily furnished with the furnishing physician or practitioner and patient in the same location can be classified as a ``telehealth service'' for which payment can be made under section 1834(m) of the Act. Given that there may be a range of services delivered using certain telecommunications technology that, though they are separately payable under the PFS, do not fall within the definition of telehealth service set forth in section 1834(m) of the Act, the aim of Step 2 is therefore to determine whether the service at issue is, in whole or in part, inherently a face-to-face service. Services that fall outside the definition of telehealth services generally include services that do not require the presence of, or involve interaction with, the patient (for example, remote interpretation of diagnostic imaging tests, and certain care management services). Other examples include virtual check-ins, e- [[Page 32389]] visits, and remote patient monitoring services which involve the use of telecommunications technology to facilitate interactions between the patient and practitioner, but do not serve as a substitute for an in- person encounter. In determining whether a service is subject to the provisions of section 1834(m) of the Act, we therefore review during this Step 2 whether one or more of the elements of the service, as described by the particular HCPCS code at issue, ordinarily involve direct, face-to-face interaction between the patient and physician or practitioner such that the use of an interactive telecommunications system to deliver the service would be a substitute for an in-person visit. Step 3. Review the elements of the service as described by the HCPCS code and determine whether each of them is capable of being furnished using an interactive telecommunications system as defined in Sec. 410.78(a)(3). Step 3 is corollary to Step 2 and is used to determine whether one or more elements of a service are capable of being delivered via an interactive telecommunication system as defined in Sec. 410.78(a)(3). In Step 3, we consider whether one or more face-to-face component(s) of the service, if furnished via audio-video communications technology, would be equivalent to the service being furnished in-person, and we seek information from requesters to demonstrate evidence of substantial clinical improvement in different beneficiary populations that may benefit from the requested service when furnished via telehealth, including, for example, in rural populations. The services are not equivalent when the clinical actions, or patient interaction, would not be of similar content as an in-person visit, or could not be completed. Additionally, we are proposing to simplify our Medicare Telehealth Services List review process by removing the distinction between provisional and permanent services and focusing our review on whether the service can be furnished using an interactive, two-way audio-video telecommunications system. We are seeking comments on our proposal to refine the Medicare Telehealth Services List review process. We also invite comments regarding safety and/or quality concerns. We would like to re-emphasize that a service's presence on the Medicare telehealth list does not indicate that CMS believes that telehealth may be appropriate in all circumstances; instead, we rely on physicians and other practitioners to use their professional judgment to make appropriate determinations based on the needs of the individual patient. c. Requests To Add Services to the Medicare Telehealth Services List for CY 2026 We received several requests to add various services to the Medicare Telehealth Services List, effective for CY 2026, some of which we believe would meet the proposed revised criteria for being added to the Medicare Telehealth Services List. That is, we reviewed these services and found that they would meet the criteria of the 3-step process proposed in section D(1)(b). The requested services are listed in Table 8. Consistent with the deadline for our receipt of code valuation recommendations from the American Medical Association's Relative Value Scale Update Committee (AMA RUC) and other interested parties (83 FR 59491) and with the process set forth in prior calendar years, for CY 2026, requests to add services to the Medicare Telehealth Services List must have been submitted to and received by CMS by February 10, 2025. Consistent with the deadline for our receipt of code valuation recommendations from the AMA RUC and other interested parties (83 FR 59491) and with the process set forth in prior calendar years, for CY 2027, requests to add services to the Medicare Telehealth Services List must be submitted to and received by CMS by February 10, 2026. The deadline for each request to add a service to the Medicare Telehealth Services List must include any supporting documentation the requester wishes us to consider as we review the request. Because we use the annual PFS rulemaking process to make changes to the Medicare Telehealth Services List, requesters are advised that any information submitted as part of a request is subject to public disclosure for this purpose. For more information on submitting a request to add services to the Medicare Telehealth Services List, including where to send these requests, and to view the current Medicare Telehealth Service List, see our website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html. [[Page 32390]] [GRAPHIC] [TIFF OMITTED] TP16JY25.013 The following is a discussion of the requests received for the addition of services to the Medicare Telehealth Services List: (1) Multiple-Family Group Psychotherapy We received a request to add CPT code 90849 (Multiple-Family Group Psychotherapy) to the Medicare Telehealth Services List. This code describes the provision of psychotherapy to multiple adult or adolescent patients and their family members simultaneously. This code was requested to be added in the CY 2022 PFS Final Rule, but we did not add it to the Medicare Telehealth Services List at the time because these services were not separately payable and had a restricted payment status, indicating that claims must be adjudicated on a case-by-case basis when furnished in-person 86 FR 65052. In the CY 2023 PFS Final Rule, we finalized a change in the procedure status indicator for CPT code 90849, which is now assigned an A for active status meaning that the service is now separately payable under the PFS. Based on our review, we believe this service now meets step 1 of our review process because it is currently assigned status indicator A, meets step 2 of our review process because it is a service ordinarily furnished with the furnishing practitioner and patient in the same location and therefore is subject to the provisions of section 1834(m) of the Act, and meets step 3 because that all elements of this service may be furnished using an interactive telecommunications system as defined in Sec. 410.78(a)(3). Therefore, we are proposing to add this service to the Medicare Telehealth Services List. We welcome public comments on this proposal. (2) Group Behavioral Counseling for Obesity We received a request to add CPT code G0473 (Face-to-face behavioral counseling for obesity, group (2-10), 30 minutes) to the Medicare Telehealth Services List. This code includes a 30-minute group session that consists of a dietary assessment, counseling, and behavioral therapy, as well as one face-to-face visit per week for each week for the first month, one face-to-face visit every other week for months two through six, and one face-to-face visit per month for months seven through twelve (if an individual loses 3kg in the first six months). Based on our review, we believe this service meets step 1 of our review process because it is currently assigned status indicator A, meets step 2 of our review process because it is a service ordinarily furnished with the furnishing practitioner and patient in the same location and therefore is subject to the provisions of section 1834(m) of the Act, and meets step 3 because that all elements of this service may be furnished using an interactive telecommunications system as defined in 410.78(a)(3). Therefore, we propose to add this service to the Medicare Telehealth Services List. We welcome public comments on this proposal. (3) Infectious Disease Add-On We received a request to add CPT code G0545 (Visit complexity inherent to hospital inpatient or observation care [[Page 32391]] associated with a confirmed or suspected infectious disease by an infectious diseases consultant, including disease transmission risk assessment and mitigation, public health investigation, analysis, and testing, and complex antimicrobial therapy counseling and treatment. (add-on code, list separately in addition to hospital inpatient or observation evaluation and management visit, initial, same day discharge, or subsequent) to the Medicare Telehealth Services List. This code can include service elements such as disease transmission risk assessment and mitigation, public health investigation and analysis, and complex antimicrobial therapy counseling. Based on our review, we believe this service meets step 1 of our review process because it is currently assigned status indicator A (meaning that the service is separately payable under the PFS), meets step 2 of our review process because it is a service ordinarily furnished with the furnishing practitioner and patient in the same location and therefore is subject to the provisions of section 1834(m) of the Act, and meets step 3 because that all elements of this service may be furnished using an interactive telecommunications system as defined in 410.78(a)(3). Therefore, we propose to add this service to the Medicare Telehealth Services List. We welcome public comments on this proposal. (4) Auditory Osseointegrated Sound Processor We received a request to add CPT codes 92622 (Diagnostic analysis, programming, and verification of an auditory osseointegrated sound processor, any type; first 60 minutes) and 92623 (Diagnostic analysis, programming, and verification of an auditory osseointegrated sound processor, any type; each additional 15 minutes (List separately in addition to code for primary procedure)) to the Medicare Telehealth Services List. Based on our review, we believe these services meet step 1 of our review process because they are currently assigned status indicator A (meaning that the service is separately payable under the PFS), meet step 2 of our review process because they are services ordinarily furnished with the furnishing practitioner and patient in the same location and therefore subject to the provisions of section 1834(m) of the Act, and meet step 3 because that all elements of these services may be furnished using an interactive telecommunications system as defined in 410.78(a)(3). Therefore, we propose to add these services to the Medicare Telehealth Services List. We welcome public comments on this proposal. (5) Dialysis We received a request to add dialysis procedures described by CPT codes 90935 (Hemodialysis procedure with single evaluation by a physician or other qualified health care professional), 90937 (Hemodialysis procedure requiring repeated evaluation(s) with or without substantial revision of dialysis prescription), 90945 (Dialysis procedure other than hemodialysis (for example, peritoneal dialysis, hemofiltration, or other continuous renal replacement therapies), with single evaluation by a physician or other qualified health care professional), and 90947 (Dialysis procedure other than hemodialysis (for example, peritoneal dialysis, hemofiltration, or other continuous renal replacement therapies) requiring repeated evaluations by a physician or other qualified health care professional, with or without substantial revision of dialysis prescription) to the Medicare Telehealth Services List. These codes describe reviewing medical records, obtaining an interval history, performing an expanded problem focused or detailed physical examination, formulating and/or revising diagnosis and treatment plan(s) (moderate or high complexity medical decision-making), and discussing diagnosis and treatment. On either a single or two or more visits, the practitioner assesses the patient and response so far to dialysis, writes and/or reviews orders, and supervises dialysis. We are not proposing to add these services to the Medicare Telehealth Services List at this time, as we do not believe that we have enough information to determine if these services meet step 3 of the Medicare Telehealth review process. It is not clear under what clinical circumstances this service could be furnished via telehealth and how all service elements would be performed when furnished via telehealth. We seek comments on whether the elements of the service are capable of being delivered via an interactive telecommunication system as required for Medicare telehealth services under Sec. [thinsp]410.78(a)(3). We also seek comments regarding the service elements clinical staff at the originating site are performing and how these patient interactions compare to service elements that the professional may be furnishing via telehealth. When adding ESRD-related services (CPT codes 90963-90966, 90967-90970) to the Medicare Telehealth Service list in the CY 2015 (80 FR 41783) and CY 2017 (81 FR 80194) final rules with comment period, we noted the clinical examination of the access site must still be furnished face-to-face ``hands-on'' (without the use of an interactive telecommunications system) by a physician, CNS, NP, or PA. We seek comment to see if this requirement would also be appropriate for CPT codes 90935, 90937, 90945, and 90947 or if any other service elements need to be furnished ``hands-on.'' At this time, we require more information to determine whether this requirement of a ``hands-on'' clinical examination by a physician, CNS, NP, or PA would inhibit furnishing these services via telehealth, or if a practitioner at the originating site could perform this requirement. (6) Home INR Monitoring We received a request to add Home INR Monitoring (HCPCS code G0248) to the Medicare Telehealth Services List for CY 2026. This service, as described by HCPCS code G0248, encompasses a face-to-face demonstration of the use and care of the INR monitor, obtaining at least one blood sample, providing instructions for reporting home INR test results, and documenting the patient's ability to perform testing and report results. In response to this request for the CY 2025 PFS proposed rule, commenters explained in detail that the interaction with the patient described by this service is generally delivered by individuals considered to be clinical staff and not a physician or practitioner as defined under section 1834(m)(4) of the Act. ``Clinical staff'' means someone who is supervised by a physician or other qualified health care professional and is allowed by law, regulation, and facility policy to perform or assist in a specialized professional service but does not individually report that professional service. After reviewing these comments and receiving additional information from interested parties, especially those that reminded us that the patient interactions for this service typically occur with clinical staff, it is clear that this is not a service that is generally furnished via a telecommunications system by a physician or a practitioner, as defined under section 1834(m)(4) of the Act, but rather is a technical part of a service delivered by clinical staff employed or otherwise providing services for a supplier. Indeed, the patient interaction portion of the service is valued under the PFS as typically involving the clinical staff of a supplier rather than the professional work of a physician or practitioner. Furthermore, there is no restriction on billing for this service and a physician/practitioner visit code on [[Page 32392]] the same day, which suggests that the interaction between the clinical staff and the patient described by this service is severable from the kind of professional service that falls under the scope of section 1834(m) of the Act. We understand that before the broad adoption of telecommunications technology for patient interactions nearly 6 years ago, these interactions may have typically taken place in person, and we considered the request to add this service to the telehealth list in that context. However, the interaction described explicitly by the code does not indicate an interaction between the patient and a physician or other practitioner. Because such an interaction falls outside the scope of the definition of Medicare telehealth service, it does not meet step 2 of our review process. Therefore, we are not proposing adding HCPCS code G0248 to the Medicare list of telehealth services. We welcome public comments on this proposal. (7) Telemedicine E/M Services We received a request to add the telemedicine E/M services (CPT codes 98000-98015) to the Medicare Telehealth Services List. These services do not satisfy the criteria under Step 1 of our process. Specifically, they are not separately payable under the Medicare PFS, as they are currently assigned status indicator I (Not valid for Medicare purposes). Given that these services are not separately payable when furnished in person, they likewise will not be separately payable when furnished via telehealth. Therefore, this service does not meet Step 1 of our review process. We are not proposing to add them to the Medicare list of telehealth services. We welcome public comments on this proposal. (8) Clarification on DMHT/RPM/RTM We have received a number of questions regarding Digital Mental Health Treatment (DMHT), Remote Physiologic Monitoring (RPM), and Remote Therapeutic Monitoring (RTM) services and the applicability of the telehealth rules. We would like to clarify that these services, which are inherently non-face-to-face, do not meet the definitions of 1834(m) of the Act, fall outside the scope of the definition of Medicare telehealth service, and do not meet step 2 of our review process. These services are not subject to section 1834(m) of the Act. (9) Services Requested To Be Transitioned From Provisional to Permanent We received a number of submissions requesting for services on the Medicare Telehealth Services List designated as ``provisional'' to be designated as ``permanent.'' If our proposal to eliminate these designations is finalized, these codes will remain on the Medicare Telehealth Services List. If not, rather than selectively adjudicating only those services for which we received requests for potential permanent status, we believe it would be appropriate to complete a comprehensive analysis of all provisional codes currently on the Medicare Telehealth Services List before determining which codes should be made permanent. We are therefore proposing to not making determinations to recategorize provisional codes as permanent at this time. For CY 2026, we propose to revise the Medicare Telehealth Services criteria. We propose to remove steps 4 and 5 from the review process. Using these revised criteria, we propose to add 5 new codes to the Medicare Telehealth Services list that are not on the CY 2025 Medicare Telehealth Services list. After consideration of the priorities discussed above, we believe that these proposed policies will increase the flexibility for physicians or other practitioners to exercise their complex professional judgment, factoring in patient safety considerations, and for flexibility for patients to choose the modality of care in which to receive services. The services we propose adding to the Medicare Telehealth Services List are listed in Table A- D2. (10) Deleted Services In section II.I. of this proposed rule, we proposed to delete HCPCS code G0136. This code is currently on the Medicare Telehealth Services List, so it will also be deleted from the list if finalized. [GRAPHIC] [TIFF OMITTED] TP16JY25.014 d. Frequency Limitations on Medicare Telehealth Subsequent Care Services in Inpatient and Nursing Facility Settings, and Critical Care Consultations When adding some services to the Medicare Telehealth Services List in the past, we have included certain frequency restrictions on how often physicians and other practitioners may furnish the service via telehealth. These include a limitation of one subsequent hospital care service furnished through telehealth every three days, added in the CY 2011 PFS final rule (75 FR 73317 through 73318), one subsequent nursing facility visit furnished through telehealth every 14 days, added in the CY 2011 PFS final rule (75 FR 73318), and one critical care consultation service furnished through telehealth per day, added in the CY 2017 final rule (81 FR 80198). In establishing these limits, we cited concerns regarding these patients' potential acuity and complexity. We temporarily removed these frequency restrictions during the PHE for COVID-19. In the March 31, 2020 COVID-19 interim final rule with comment period (IFC) (85 FR 19241), we stated that we did not believe the frequency limitations for certain subsequent inpatient visits, subsequent NF visits, and critical care consultations furnished via Medicare telehealth were appropriate or necessary for the duration of the PHE because this would have been a patient population who would have otherwise not had access to clinically appropriate in-person treatment. Although the frequency limitations resumed effect on May 12, [[Page 32393]] 2023 (upon expiration of the PHE), through enforcement discretion during the remainder of CY 2023 and notice-and-comment rulemaking for CY 2024 and CY 2025, Medicare telehealth frequency limitations were suspended for CY 2025 (89 FR 97758 through 97760) for certain subsequent inpatient visits, subsequent NF visits, and critical care consultations. In the CY 2024 (88 FR 78877) and CY 2025 PFS final rules (89 FR 97758 through 97760), we solicited comments from interested parties on how physicians and other practitioners have been ensuring that Medicare beneficiaries receive subsequent inpatient and nursing facility visits, as well as critical care consultation services since the expiration of the PHE. As discussed in those final rules, many commenters supported permanently removing these frequency limitations, stating that they are arbitrary and re-imposing the limitations would result in decreased access to care; that physicians and other practitioners should be allowed to use their professional judgment to determine the type of visit, how many visits, and the type of treatment that is the best fit for the patient so long as the standard of care is met; and that lifting these limitations during the PHE has been instructive and demonstrates the value of continuing such flexibilities. Some commenters did not support removing these frequency limitations, citing patient acuity and safety. However, our analysis of claims data from 2020 to 2023 indicates that the volume of services that would be affected by implementing these limitations is relatively low; in other words, these services are not being furnished via telehealth with such frequency that, if the frequency limits were in place, they would be met or exceeded very often or for many beneficiaries. Claims data from 2020 to 2023 suggest that less than five percent of beneficiaries who received one or more of these services (subsequent care services in inpatient and nursing facility settings, and critical care consultations) received them as telehealth services. In addition, we have solicited comments on this policy for two years and have received overwhelming support for continuing this flexibility, with minimal commenters not supporting the removal of frequency limitations. We believe that physicians and other practitioners, who have the greatest familiarity and insight into the needs of individual beneficiaries, can use their complex professional judgment to determine whether they can safely furnish a service via telehealth, given the entirety of the circumstances, including the clinical profile and needs of the beneficiary, to determine the appropriate service modality. We strive to balance the goals of increasing physician or practitioner and patient choice of service modality with consideration of patient safety for all Medicare beneficiaries. As technology advances and more services may be safely furnished via telehealth and paid under the PFS, it is increasingly important for physicians and other practitioners to exercise their professional judgment in determining the generally appropriate service modality for their patients to receive a service. Notably, the removal of these frequency limitations does not mean that these services are appropriate to be furnished via telehealth to every Medicare beneficiary in every clinical scenario--as always, the physician or practitioner should use his or her complex professional judgment to determine the appropriate service modality on a case-by- case basis. We are proposing to permanently remove frequency limitations on furnishing these services via telehealth for the following codes relating to Subsequent Inpatient Visits, Subsequent Nursing Facility Visits, and Critical Care Consultation Services:

1. Subsequent Inpatient Visit CPT Codes:

99231 (Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward or low level of medical decision making. When using total time on the date of the encounter for code selection, 25 minutes must be met or exceeded.); 99232 (Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. when using total time on the date of the encounter for code selection, 35 minutes must be met or exceeded.); and 99233 (Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making. when using total time on the date of the encounter for code selection, 50 minutes must be met or exceeded.)

2. Subsequent Nursing Facility Visit CPT Codes:

99307 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward medical decision making. when using total time on the date of the encounter for code selection, 10 minutes must be met or exceeded.); 99308 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and low level of medical decision making. When using total time on the date of the encounter for code selection, 15 minutes must be met or exceeded.); 99309 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. when using total time on the date of the encounter for code selection, 30 minutes must be met or exceeded.); and 99310 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making. when using total time on the date of the encounter for code selection, 45 minutes must be met or exceeded.)

3. Critical Care Consultation Services: HCPCS Codes

G0508 (Telehealth consultation, critical care, initial, physicians typically spend 60 minutes communicating with the patient and providers via telehealth.); and G0509 (Telehealth consultation, critical care, subsequent, physicians typically spend 50 minutes communicating with the patient and providers via telehealth.) We are seeking comments on these proposals, specifically additional information regarding potential concerns about patient safety and quality of care. 2. Other Non-Face-to-Face Services Involving Communications Technology Under the PFS a. Direct Supervision via Use of Two-Way Audio/Video Communications Technology Under Medicare Part B, certain types of services, including diagnostic tests described under Sec. 410.32 and services incident to a physician's (or other practitioner's) professional service described under Sec. 410.26 (incident-to services), are required to be furnished under specific minimum levels of supervision by a physician or other practitioner. We define three levels of supervision in our regulation at [[Page 32394]] Sec. 410.32(b)(3): General Supervision, Direct Supervision, and Personal Supervision. Notwithstanding the temporary measures implemented in response to the PHE for COVID-19 and extended thereafter, direct supervision has historically required the physician (or other supervising practitioner) to be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the service. It has not historically been interpreted as mean that the physician (or other supervising practitioner) must be present in the room when the service is performed. Again, notwithstanding the temporary measures implemented in response to the PHE for COVID-19 and extended thereafter, we have historically established this ``immediate availability'' requirement to mean in-person, physical, not virtual, availability (see the April 6, 2020 IFC (85 FR 19245) and the CY 2022 PFS final rule (86 FR 65062)). Direct supervision is required for various types of services, including most incident-to-services under Sec. 410.26, many diagnostic tests under Sec. 410.32, pulmonary rehabilitation services under Sec. 410.47, cardiac rehabilitation and intensive cardiac rehabilitation services under Sec. 410.49, and certain hospital outpatient services as provided under Sec. 410.27(a)(1)(iv). In the March 31, 2020 COVID- 19 IFC, we amended the definition of ``direct supervision'' for the duration of the PHE for COVID-19 (85 FR 19245 through 19246) at Sec. 410.32(b)(3)(ii) to state that the necessary presence of the physician (or other practitioner) for direct supervision includes virtual presence through audio/video real-time communications technology. Instead of requiring the supervising physician's (or other practitioner's) physical presence, the amendment permitted a supervising physician (or other practitioner) to be considered ``immediately available'' through virtual presence using two-way, real- time audio/visual technology for diagnostic tests, incident-to services, pulmonary rehabilitation services, and cardiac and intensive cardiac rehabilitation services. We made similar amendments at Sec. 410.27(a)(1)(iv) to specify that direct supervision for certain hospital outpatient services may include virtual presence through audio/video real-time communications. The CY 2021 PFS final rule (85 FR 84538 through 84540), CY 2024 PFS final rule (88 FR 78878), and CY 2025 PFS Final rule (89 FR 97764) subsequently extended these policies through December 31, 2025. In the CY 2024 PFS proposed rule, we solicited comments on whether we should consider extending the definition of direct supervision to permit virtual presence beyond December 31, 2024. Specifically, we stated we were interested in input from interested parties on potential patient safety or quality concerns when direct supervision occurs virtually; for instance, if virtual direct supervision of certain types of services is more or less likely to present patient safety concerns, or if this flexibility would be more appropriate for certain types of services, or when certain types of auxiliary personnel are performing the supervised service. We stated we were also interested in potential program integrity concerns such as overutilization or fraud and abuse that interested parties may have in regard to this policy (88 FR 52302). As discussed in the CY 2024 PFS final rule (88 FR 78878), in the absence of evidence that patient safety is compromised by virtual direct supervision, we were concerned about an abrupt transition to our pre-PHE policy that defines direct supervision to require the physical presence of the supervising practitioner. We noted that an immediate reversion to the pre-PHE definition of direct supervision would prohibit virtual direct supervision, which may present a barrier to access to many services, such as incident-to-services, and that physicians and/or other supervising practitioners, in certain instances, would need time to reorganize their practice patterns established during the PHE to reimplement the pre-PHE approach to direct supervision without the use of audio/video technology. We acknowledged the utilization of this flexibility and recognize that many practitioners have stressed the importance of maintaining it. This flexibility has been available and widely utilized since the beginning of the PHE, and we recognized that it may enhance patient access. In the CY 2025 PFS final rule (89 FR 97763), we acknowledged the utilization of this flexibility and stated we recognized that many practitioners have stressed the importance of maintaining it but were seeking additional information regarding potential patient safety and quality of care concerns. Given the importance of certain services being furnished under direct supervision in ensuring quality of care and patient safety, and in particular the ability of the supervising practitioner to intervene if complications arise, we stated that we believed an incremental approach is warranted, particularly in instances where unexpected or adverse events may arise for procedures which may be riskier or more intense. In light of these potential safety and quality of care implications, and exercising an abundance of caution, we finalized the revision of the regulation at Sec. 410.26(a)(2) to state that for the following services furnished after December 31, 2025, the presence of the physician (or other practitioner) required for direct supervision shall continue to include virtual presence through audio/video real-time communications technology (excluding audio-only): services furnished incident to a physician's service when they are provided by auxiliary personnel employed by the physician and working under his or her direct supervision and for which the underlying HCPCS code has been assigned a PC/TC indicator of `5'; and services described by CPT code 99211 (office and other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician or other qualified health care professional). In response to overwhelming support and requests to extend this policy permanently for a wider set of services than the ones that were finalized in the CY 2025 PFS Final Rule, we are proposing to continue to build on this incremental approach to allow certain services to be furnished under direct supervision that allows ``immediate availability'' of the supervising practitioner using audio/video real- time communications technology (excluding audio-only). We are proposing to permanently adopt a definition of direct supervision that allows ``immediate availability'' of the supervising practitioner using audio/ video real-time communications technology (excluding audio-only), for all services described under Sec. 410.26, except for services that have a global surgery indicator of 010 or 090. This information can be found in the PFS PPRVU public use file (https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files). These global surgery indicators are defined in IOM Pub. 100-04, chapter 23, section 50.6 as 010 ``Minor procedure with preoperative relative values on the day of the procedure and postoperative relative values during a 10-day postoperative period included in the fee schedule amount; evaluation and management services on the day of the procedure and during this 10- day postoperative period generally not payable'' and 090 ``Major surgery with a 1-day preoperative period and 90-day postoperative period included in the fee schedule payment amount.'' The [[Page 32395]] purpose of excluding these services is to ensure the quality of care and patient safety, and in particular, the ability of the supervising practitioner to intervene if complications arise, particularly in complex, high-risk instances where unexpected or adverse events may occur or for procedures that may be riskier or more intense where a patient's clinical status can quickly change. For such services, in- person supervision would be necessary to allow for rapid on-site decision-making in the event of an adverse clinical situation. We would like to note that, similar to our guidance above regarding Medicare Telehealth services, our proposed definition of direct supervision (allowing ``immediate availability'' of the supervising practitioner using audio/video real-time communications technology (excluding audio-only) for all services described under Sec. 410.26, except for services that have a global surgery indicator of 010 or 090), does not mean that it is appropriate to allow virtual presence for every service for every Medicare beneficiary in every clinical scenario. As always, the physician or practitioner should use his or her complex professional judgment to determine the appropriate supervision modality on a case-by-case basis. We are proposing to revise the regulation at Sec. 410.26(a)(2) to state that the presence of the physician (or other practitioner) required for direct supervision may include virtual presence through audio/video real-time communications technology (excluding audio-only) for services without a 010 or 090 global surgery indicator. We are proposing to revise the regulations at Sec. 410.32(b)(3)(ii) to state that the presence of the physician (or other practitioner) may include virtual presence through audio/video real- time communications technology (excluding audio-only) for services without a 010 or 090 global surgery indicator. We note that because to the definition of direct supervision applicable to cardiac, pulmonary, and intensive cardiac rehabilitation services relies on the definition of direct supervision set forth at Sec. 410.32(b)(3)(ii), the definition of direct supervision for these services would similarly be modified to include virtual presence through audio/video real-time communications technology (excluding audio-only) for services without a 010 or 090 global surgery indicator. We are seeking comment on applying this definition to the applicable services under Sec. 410.32 and the applicable cardiac, pulmonary, and intensive cardiac rehabilitation services. We are seeking comment on whether to adopt a definition of direct supervision that allows ``immediate availability'' of the supervising practitioner using audio/video real-time communications technology (excluding audio-only), for all services described under Sec. 410.26, except for services that have a 000, 010, or 090 global surgery indicator. For each of these proposals, we are also seeking additional information regarding potential concerns about patient safety and quality of care for services that have a 000 global surgery indicator and if it is necessary to exclude these services from allowing the presence of the physician (or other practitioner) to include virtual presence through audio/video real-time communications technology (excluding audio-only). Global surgery indicator 000 is defined in IOM Pub. 100-04, chapter 23, section 50.6 as ``Endoscopic or minor procedure with related preoperative and postoperative relative values on the day of the procedure only included in the fee schedule payment amount; evaluation and management services on the day of the procedure generally not payable''. We believe that these services, which have no minimum postoperative period, do not have the same potential patient safety risk that services with a 010 or 090 global surgery indicator may have. We are seeking comments on these proposals. b. Proposed Changes to Teaching Physicians' Billing for Services Involving Residents With Virtual Presence As discussed in the CY 2025 PFS final rule (89 FR 97764 through 97765), in the CY 2021 PFS final rule (85 FR 84577 through 84585), we established a policy that after the end of the PHE for COVID-19, teaching physicians may meet the requirements set forth at Sec. 1842(b)(7)(A)(i)(I) to be present for the key or critical portions of services when furnished involving residents through audio/video real- time communications technology (virtual presence), but only for services furnished in residency training sites located outside of OMB- defined metropolitan statistical areas (MSAs). We made this location distinction consistent with our longstanding interest in increasing beneficiary access to Medicare-covered services in rural areas. We noted that this policy provides the ability to expand training opportunities for residents in rural settings. For all other locations, we expressed concerns that continuing to permit teaching physicians to bill for services furnished involving residents when they are virtually present, outside the conditions of the PHE for COVID-19, may not allow the teaching physician to have personal oversight and involvement over the management of the portion of the case for which the payment is sought, under section 1842(b)(7)(A)(i)(I) of the Act. In addition, we stated concerns about patient populations that may require a teaching physician's experience and skill to recognize specialized needs or testing and whether it is possible for the teaching physician to meet these clinical needs while having a virtual presence for the key portion of the service. We refer readers to the CY 2021 PFS final rule (85 FR 84577 through 84584) for a more detailed description of our specific concerns. At the end of the PHE for COVID-19, and as finalized in the CY 2021 PFS final rule, we intended for the teaching physician to have a physical presence during the key portion of the service personally provided by residents to be paid for the service under the PFS, in locations that were within an MSA. This policy applied to all services, regardless of whether the patient was co-located with the resident or for services provided virtually (for example, the service was furnished as a 3-way telehealth visit, with the teaching physician, resident, and patient in different locations). However, interested parties expressed concerns regarding the requirement that the teaching physician be physically present with the resident when a service is furnished virtually (as a Medicare telehealth service) within an MSA. Some interested parties stated that during the PHE for COVID-19, when residents provided telehealth services, and the teaching physician was virtually present, the same safe and high-quality oversight was provided as when the teaching physician and resident were physically co-located. In addition, these interested parties stated that during telehealth visits, the teaching physician was virtually present during the key and critical portions of the telehealth service, available immediately in real-time, and had access to the electronic health record. After reviewing the public comments, we finalized a temporary policy that allowed the teaching physician to have a virtual presence in all teaching settings, but only in clinical instances when the service was furnished virtually (for example, a 3-way telehealth visit, with all parties in separate locations). This permitted teaching physicians to have a virtual presence during the key portion of the Medicare telehealth service for which payment was sought, through audio/video real-time communications technology, in all residency training locations through December 31, 2024. [[Page 32396]] As stated in the CY 2025 PFS final rule (89 FR 97765), we were concerned that an abrupt transition to our pre-PHE policy may present a barrier to access to many services. We also understood that teaching physicians gained clinical experience providing services involving residents with virtual presence during the PHE for COVID-19 and could help us to identify circumstances where the teaching physician can routinely provide sufficient personal and identifiable services to the patient through their virtual presence during the key portion of the Medicare telehealth service. We sought comments and information to help us consider other clinical treatment situations where it may be appropriate to continue to permit the virtual presence of the teaching physician, while continuing to support patient safety, meeting the clinical needs for all patients and ensuring burden reduction without creating risks to patient care or increasing opportunities for fraud. As summarized in the CY 2025 PFS final rule (89 FR 97764 through 97765), commenters encouraged us to establish this policy permanently and include in -person services to promote access to care, stated that teaching physicians should be allowed to determine when their virtual presence would be clinically appropriate, based on their assessment of the patient's needs and the competency level of the resident. While we continue to consider clinical scenarios where it may be appropriate to permit the virtual presence of the teaching physician, we are proposing to transition back to our pre-PHE policy, which would maintain the rural exception established in the CY 2021 PFS final rule recognizing the unique challenges and importance of expanding medical education opportunities in rural settings. We are not proposing to extend our current policy to allow teaching physicians to have a virtual presence for purposes of billing for services furnished involving residents in all teaching settings through December 31, 2025, but only when the service is furnished virtually (for example, a 3-way telehealth visit, with the patient, resident, and teaching physician in separate locations). As always, documentation in the medical record must continue to demonstrate whether the teaching physician was physically present or present through audio/video real-time communications technology at the time of the Medicare telehealth service, which includes documenting the specific portion of the service for which the teaching physician was present through audio/video real-time communications technology. As discussed in earlier in this proposed rule, we are concerned that continuing to permit teaching physicians to bill for services furnished involving residents when they are virtually present, outside the conditions of the PHE for COVID-19, may not allow the teaching physician to have personal oversight and involvement over the management of the portion of the case for which the payment is sought in accordance with section 1842(b)(7)(A)(i)(I) of the Act. Therefore, we now believe that permitting Medicare payment to continue for this PHE flexibility is no longer necessary. This proposal to not extend our current policy to allow teaching physicians to have a virtual presence for services furnished virtually aligns with our statutory obligations under section 1842(b)(7)(A)(i)(I) of the Act, which requires teaching physicians to provide appropriate oversight and personal involvement in resident-furnished services for which Medicare payment is sought. Under this proposal, for services provided within MSAs, physicians must maintain physical presence during critical portions of all resident-furnished services to qualify for Medicare payment, not just in-person services, ensuring consistent oversight standards. Documentation requirements remain rigorous, with medical records needing to clearly demonstrate the teaching physician's physical presence during key service portions. However, as we discussed earlier in this proposed rule, recognizing the unique challenges faced by rural healthcare providers, we maintain flexibility for services provided outside MSAs. In these rural settings, teaching physicians may continue utilizing audio/video real-time communications technology to fulfill the presence requirement, provided they maintain active, real-time observation and participation in the service. This geographical distinction aligns with our longstanding commitment to enhancing Medicare beneficiary access to covered services in rural areas. The proposed to not extend flexibilities for virtual services would not impact teaching physicians' ability to provide virtual supervision of residents for educational purposes. Teaching physicians retain the discretion to provide greater involvement in resident-furnished services and may determine when virtual presence is appropriate based on the specific services and the experience level of the residents involved. 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, and specifies that, for telehealth services furnished on or after January 1 of each subsequent calendar year, the telehealth originating site facility fee is increased by the percentage increase in the Medicare Economic Index (MEI) as defined in section 1842(i)(3) of the Act. The proposed percentage increase in the MEI for CY 2026 is 2.7 percent and is based on the expected historical percentage increase of the 2017- based MEI. For the final rule, we propose to update the MEI increase for CY 2026 based on historical data through the second quarter of 2025. Therefore, for CY 2026, the proposed payment amount for HCPCS code Q3014 (Telehealth originating site facility fee) is $31.85. Table 10 shows the Medicare telehealth originating site facility fee and the corresponding MEI percentage increase for each applicable time period. [[Page 32397]] [GRAPHIC] [TIFF OMITTED] TP16JY25.015

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

Misvalued Codes Establishing valuations for newly created and revised CPT codes is a routine part of maintaining the PFS. Since the inception of the PFS, it has also been a priority to revalue services regularly to make sure that the payment rates reflect the changing trends in the practice of medicine and current prices for inputs used in the PE calculations. Initially, this was accomplished primarily through the 5-year review process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 2011, and revised MP RVUs in CY 2010, CY 2015, and CY 2020. Under the 5-year review process, revisions in RVUs were proposed and finalized via rulemaking. In addition to the 5-year reviews, beginning with CY 2009, CMS and the RUC identified a number of potentially misvalued codes each year using various identification screens, as outlined in section II.C. of this proposed rule, Potentially Misvalued Services under the PFS. Historically, when we received RUC recommendations, our process had been to establish interim final RVUs for the potentially misvalued codes, new codes, and any other codes for which there were coding changes in the final rule with comment period for a year. Then, during the 60-day period following the publication of the final rule with comment period, we accepted public comments about those valuations. For services furnished during the calendar year following the publication of interim final rates, we paid for services based upon the interim final values established in the final rule. In the final rule with comment period for the subsequent year, we considered and responded to public comments received on the interim final values and typically made any appropriate adjustments and finalized those values. In the CY 2015 PFS final rule with comment period (79 FR 67547), we finalized a new process for establishing values for new, revised and potentially misvalued codes. Under the new process, we include proposed values for these services in the proposed rule, rather than establishing them as interim final in the final rule with comment period. Beginning with the CY 2017 PFS proposed rule (81 FR 46162), the new process was applicable to all codes, except for new codes that describe truly new services. For CY 2017, we proposed new values in the CY 2017 PFS proposed rule for the vast majority of new, revised, and potentially misvalued codes for which we received complete RUC recommendations by February 10, 2016. To complete the transition to this new process, for codes for which we established interim final values in the CY 2016 PFS final rule with comment period (81 FR 80170), we reviewed the comments received during the 60-day public comment period following release of the CY 2016 PFS final rule with comment period (80 FR 70886), and re-proposed values for those codes in the CY 2017 PFS proposed rule. We considered public comments received during the 60-day public comment period for the proposed rule before establishing final values in the CY 2017 PFS final rule. As part of our established process, we will adopt interim final values only in the case of wholly new [[Page 32398]] services for which there are no predecessor codes or values and for which we do not receive recommendations in time to propose values. As part of our obligation to establish RVUs for the PFS, we thoroughly review and consider available information including recommendations and supporting information from the RUC, the Health Care Professionals Advisory Committee (HCPAC), public commenters, medical literature, Medicare claims data, comparative databases, comparison with other codes within the PFS, as well as consultation with other physicians and healthcare professionals within CMS and the Federal Government as part of our process for establishing valuations. Where we concur that the RUC's recommendations, or recommendations from other commenters, are reasonable and appropriate and are consistent with the time and intensity paradigm of physician work, we proposed those values as recommended. Additionally, we continually engage with interested parties, including the RUC, regarding our approach for accurately valuing codes, and as we prioritize our obligation to value new, revised, and potentially misvalued codes. We continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process.

2. Methodology for Establishing Work RVUs

a. Background For each code identified in this section, we conduct a review that includes the current work RVU (if any), RUC-recommended work RVU, intensity, time to furnish the preservice, intraservice, and postservice activities, as well as other components of the service that contribute to the value. Our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, the HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). When referring to a survey, unless otherwise noted, we mean the surveys conducted by specialty societies as part of the formal RUC process. Components that we use in the building block approach may include preservice, intraservice, or postservice time and post-procedure visits. When referring to a bundled CPT code, the building block components could include the CPT codes that make up the bundled code and the inputs associated with those codes. We use the building block methodology to construct, or deconstruct, the work RVU for a CPT code based on component pieces of the code. Magnitude estimation refers to a methodology for valuing work that determines the appropriate work RVU for a service by gauging the total amount of work for that service relative to the work for a similar service across the PFS without explicitly valuing the components of that work. In addition to these methodologies, we frequently utilize an incremental methodology in which we value a code based upon its incremental difference between another code and another family of codes. Section 1848(c)(1)(A) of the Act specifically defines the work component as the resources that reflect time and intensity in furnishing the service. Also, the published literature on valuing work has recognized the key role of time in overall work. For particular codes, we refine the work RVUs in direct proportion to the changes in the best information regarding the time resources involved in furnishing particular services, either considering the total time or the intraservice time. Several years ago, to aid in the development of preservice time recommendations for new and revised CPT codes, the RUC created standardized preservice time packages. The packages include preservice evaluation time, preservice positioning time, and preservice scrub, dress and wait time. Currently, there are preservice time packages for services typically furnished in the facility setting (for example, preservice time packages reflecting the different combinations of straightforward or difficult procedure, and straightforward or difficult patient). Currently, there are three preservice time packages for services typically furnished in the nonfacility setting. We developed several standard building block methodologies to value services appropriately when they have common billing patterns. In cases where a service is typically furnished to a beneficiary on the same day as an E/M service, we believe that there is overlap between the two services in some of the activities furnished during the preservice evaluation and postservice time. Our longstanding adjustments have reflected a broad assumption that at least one-third of the work time in both the preservice evaluation and postservice period is duplicative of work furnished during the E/M visit. Accordingly, in cases where we believe that the RUC has not adequately accounted for the overlapping activities in the recommended work RVU and/or times, we adjust the work RVU and/or times to account for the overlap. The work RVU for a service is the product of the time involved in furnishing the service multiplied by the intensity of the work. Preservice evaluation time and postservice time both have a long- established intensity of work per unit of time (IWPUT) of 0.0224, which means that 1 minute of preservice evaluation or postservice time equates to 0.0224 of a work RVU. Therefore, in many cases when we remove 2 minutes of preservice time and 2 minutes of postservice time from a procedure to account for the overlap with the same day E/M service, we also remove a work RVU of 0.09 (4 minutes x 0.0224 IWPUT) if we do not believe the overlap in time had already been accounted for in the work RVU. The RUC has recognized this valuation policy and, in many cases, now addresses the overlap in time and work when a service is typically furnished on the same day as an E/M service. The following paragraphs discuss our approach to reviewing RUC recommendations and developing proposed values for specific codes. When they exist, we also include a summary of interested party reactions to our approach. We noted that many commenters and interested parties have expressed concerns over the years with our ongoing adjustment of work RVUs based on changes in the best information we had regarding the time resources involved in furnishing individual services. We have been particularly concerned with the RUC's and various specialty societies' objections to our approach given the significance of their recommendations to our process for valuing services and since much of the information we used to make the adjustments is derived from their survey process. We note that we are obligated under the statute to [[Page 32399]] consider both time and intensity in establishing work RVUs for PFS services. As explained in the CY 2016 PFS final rule with comment period (80 FR 70933), we recognize that adjusting work RVUs for changes in time is not always a straightforward process, so we have applied various methodologies to identify several potential work values for individual codes. We observed that for many codes reviewed by the RUC, recommended work RVUs have appeared to be incongruous with recommended assumptions regarding the resource costs in time. This has been the case for a significant portion of codes for which we recently established or proposed work RVUs that are based on refinements to the RUC-recommended values. When we adjusted work RVUs to account for significant changes in time, we started by looking at the change in the time in the context of the RUC-recommended work RVU. When the recommended work RVUs do not appear to account for significant changes in time, we employed the different approaches to identify potential values that reconcile the recommended work RVUs with the recommended time values. Many of these methodologies, such as survey data, building block, crosswalks to key reference or similar codes, and magnitude estimation have long been used in developing work RVUs under the PFS. In addition to these, we sometimes use the relationship between the old-time values and the new time values for particular services to identify alternative work RVUs based on changes in time components. In so doing, rather than ignoring the RUC-recommended value, we used the recommended values as a starting reference and then applied one of these several methodologies to account for the reductions in time that we believe were not otherwise reflected in the RUC- recommended value. If we believe that such changes in time are already accounted for in the RUC's recommendation, then we do not make such adjustments. Likewise, we do not arbitrarily apply time ratios to current work RVUs to calculate proposed work RVUs. We use the ratios to identify potential work RVUs and consider these work RVUs as potential options relative to the values developed through other options. We do not imply that the decrease in time as reflected in survey values should always equate to a one-to-one or linear decrease in newly valued work RVUs. Instead, we believe that, since the two components of work are time and intensity, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has increased, significant decreases in time should be reflected in decreases to work RVUs. If the RUC's recommendation has appeared to disregard or dismiss the changes in time, without a persuasive explanation of why such a change should not be accounted for in the overall work of the service, then we generally used one of the aforementioned methodologies to identify potential work RVUs, including the methodologies intended to account for the changes in the resources involved in furnishing the procedure. Several interested parties, including the RUC, have expressed general objections to our use of these methodologies and suggested that our actions in adjusting the recommended work RVUs are inappropriate; other interested parties have also expressed general concerns with CMS refinements to RUC-recommended values in general. In the CY 2017 PFS final rule (81 FR 80272 through 80277), we responded in detail to several comments that we received regarding this issue. In the CY 2017 PFS proposed rule (81 FR 46162), we requested comments regarding potential alternatives to making adjustments that would recognize overall estimates of work in the context of changes in the resource of time for particular services; however, we did not receive any specific potential alternatives. As described earlier in this section, crosswalks to key reference or similar codes are one of the many methodological approaches we employed to identify potential values that reconcile the RUC-recommended work RVUs with the recommended time values when the RUC-recommended work RVUs did not appear to account for significant changes in time. In response to comments, in the CY 2019 PFS final rule (83 FR 59515), we clarified that terms ``reference services'', ``key reference services'', and ``crosswalks'' as described by the commenters are part of the RUC's process for code valuation. These are not terms that we created, and we do not agree that we necessarily must employ them in the identical fashion for the purposes of discussing our valuation of individual services that come up for review. However, in the interest of minimizing confusion and providing clear language to facilitate feedback from interested parties, we stated that we would seek to limit the use of the term, ``crosswalk,'' to those cases where we are making a comparison to a CPT code with the identical work RVU. (83 FR 59515) We note that we also occasionally make use of a ``bracket'' for code valuation. A ``bracket'' refers to when a work RVU falls between the values of two CPT codes, one at a higher work RVU and one at a lower work RVU. We look forward to continuing to engage with interested parties and commenters, including the RUC, as we prioritize our obligation to value new, revised, and potentially misvalued codes; and we will continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process. We refer readers to the detailed discussion in this section of the valuation considered for specific codes. Table 19 contains a list of codes and descriptors for which we are proposing work RVUs for CY 2026; this includes all codes for which we received RUC recommendations by February 10, 2025. The proposed work RVUs, work time and other payment information for all CY 2026 payable codes are available on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/index.html). b. Proposed Efficiency Adjustment (1) Background CMS has historically relied on survey data provided by the American Medical Association (AMA)/Specialty Society Relative Value Scale (RVS) Update Committee (referred to as the RUC) to estimate practitioner time, work intensity, and practice expense for the purpose of establishing RVUs for the codes used for payment under the PFS. As described in section II.C. of this proposed rule, CMS regularly revalues codes as part of its potentially misvalued codes initiative, as required by section 1848(c)(2)(K) of the Act, using RUC survey data that shows clinicians' estimates of how long a particular service takes to complete. In the CY 2025 PFS final rule, we summarized public comments that we had received expressing concerns with using RUC data as a source of valuation and identifying a need for empirical data in the context of valuing advanced primary care management services (89 FR 97898). In response to these comments, we indicated that we were open to alternative recommendations for how to price these and other services, and that we would consider all options presented to us with a preference for information with empirical evidence behind it. We also reminded commenters that we do not exclusively rely on RUC recommendations and can [[Page 32400]] receive data and recommendations from other outside sources as well. The limits of survey data are in part based on the nature of the surveys. There have been longstanding concerns about the use of surveys that have low response rates, low total number of responses, and a large range in responses, all of which may undermine the accuracy of recommendations relying on survey data.\33\ For example, a Government Accountability Office (GAO) Report found that the median number of responses to surveys administered by the RUC for payment year 2015 was 52, the median response rate was only 2.2 percent, and 23 of the 231 surveys had under 30 respondents. Another study conducted compared operative times in the National Surgical Quality Improvement Project to RUC survey times, adjusted for patient variables, and found a wide variation in the median RVU per hour ratio for 11 surgical specialties, with the highest specialties overreporting (via RUC values) by 27 and 23 minutes per case. All surgical specialties showed overreporting in RUC survey times compared to operative times. This resulted in high RVU per hour payments for surgeons in those specialties.\34\ --------------------------------------------------------------------------- \33\ https://www.gao.gov/products/gao-15-434. \34\ Uppal, S., Barber, E.L., Reynolds, R.K., Rice, L.W., & Spencer, R J. 2019. Discrepancies created by surgeon self-reported operative time and its impact on procedure relative value units (RVUs) and reimbursement. Gynecologic Oncology, 154, 14. https://doi.org/10.1016/j.ygyno.2019.04.039. --------------------------------------------------------------------------- With such low response rates, we are concerned that those practitioners who respond to the RUC surveys may be fundamentally different than those clinicians who do not respond to the surveys. Widely read journals, such as the Journal for the American Medical Association, specify that for submitting authors, ``survey studies should have sufficient response rates (generally greater than or equal to 60%), and appropriate characterization of nonresponders to ensure that nonresponse bias does not threaten the validity of the findings.'' \35\ The GAO report noted that the RUC has undertaken steps to mitigate the effects of possible biases; however, the report goes on to describe the potential conflicts of interest survey respondents may have, as those that serve Medicare beneficiaries would benefit from an increase in the relative values for the services they perform.\36\ Another component of these surveys is the selection of another service code that is similar to the service in question. Since there are so many procedure, radiology, and diagnostic test codes, the selection of a high-valued service for potential comparisons, either by the specialty society administering the survey, or by respondents, could further bias results. Additionally, RUC surveys contain clinical vignettes, and expert reviewers have raised concerns that these clinical vignettes are not typical and thus may lead to biased recommendations that usually overinflate time spent on the service.\37\ And as detailed in section II.B. of this proposed rule, we further articulate the particular challenges of using the recently completed PPI survey data, including the quality of the data, sampling variation, and lack of comparability to previous survey data--similar challenges that we have experienced over time with surveys estimating the time and work intensity of individual services, used to establish the work RVUs. CMS has historically had to rely on survey data due to a lack of other more reliable sources of information, but in recent years many new methods to identify empiric inputs used in valuation have been developed.\38\ --------------------------------------------------------------------------- \35\ Journal of the American Medical Association, Instructions for Authors. Available from: https://jamanetwork.com/journals/jama/pages/instructions-for-authors. \36\ https://www.gao.gov/products/gao-15-434. \37\ Zuckerman, S., K. Merrell, R. Berenson, et al. 2016. Collecting empirical physician time data: Piloting an approach for validating work relative value units. Report prepared for the Centers for Medicare & Medicaid Services. Washington, DC: The Urban Institute. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Collecting-Empirical-Physician-Time-Data-Urban-Report.pdf. \38\ National Academies for Sciences, Engineering, and Math. Improving Primary Care Valuation Processes to Inform the Physician Fee Schedule. Available from: https://nap.nationalacademies.org/catalog/29069/improving-primary-care-valuation-processes-to-inform-the-physician-fee-schedule. --------------------------------------------------------------------------- In the CY 2024 PFS proposed rule (88 FR 78975 through 78982), we requested comments on how we may evaluate E/M services more regularly and comprehensively. We raised specific questions for commenters to consider, including whether the methods used by the RUC and CMS were appropriate to accurately value E/M and other HCPCS codes, and we requested that commenters provide specific recommendations on improving data collection and making better evidence-based and more accurate payments for E/M and other services. In response, as we summarized in the CY 2024 PFS final rule (88 FR 78977), commenters stated that the methods used do not lead to accurate valuation and that the problems lie with the nature of E/M services and the PFS's budget neutrality adjustment. They stated that the resources used in furnishing the work portion of E/M services are primarily a function of the time the clinician spends with the patient and, therefore, are not amenable to efficiency gains and that the valuation process is not responsive to efficiency gains, leading to passive devaluation of E/M services under the constraints of budget neutrality. At the time, we responded that we recognized that there are opportunities to improve how all services are valued and better account for resource variation for different types of care under the PFS. For several years, we have been concerned about not accounting for the efficiencies gained in work RVUs for non-time-based services. As we discuss below, non-time-based codes, such as codes describing procedures, radiology services, and diagnostic tests, should become more efficient as they become more common, professionals gain more experience, technology is improved, and other operational improvements (including but not limited to enhancements in procedural workflows) are implemented. We would highlight, however, that there are often many years between a code's introduction and revaluation within the RUC process, with only a few hundred out of the more than 9,000 codes paid under the PFS considered for revaluation annually by the RUC. While there is significant variability in how often codes are reviewed by the RUC, on average, CMS estimates that there are 25.49 years since a code valuation has been reviewed by the RUC (this includes 5382 out of 9970 codes which were never reviewed). When we exclude from the average those codes that have never been reviewed, the average is 17.69 years since the last review of a code by the RUC. We note that these numbers weight each code equally and the PFS itself is heavily weighted by utilization towards a much smaller number of often utilized codes. Furthermore, even when a code is reviewed by the RUC, 2 to 3 years usually pass between when the survey data was collected and its use by CMS in setting rates becomes effective. In the intervening years without revaluation, we are most likely overvaluing codes by not accounting for these efficiencies gained in the valuation of work RVUs for non-time-based services. And even when recommendations have been submitted by the RUC to CMS as potentially misvalued codes from 2009 to 2025, the RUC only recommended a decrease in the physician time and resources for the codes 39 percent of the time.\39\ --------------------------------------------------------------------------- \39\ American Medical Association. ``AMA/Specialty Society RVS Update Committee: An Overview of the RUC Process.'' Available from: https://www.ama-assn.org/system/files/ruc-update-booklet.pdf. --------------------------------------------------------------------------- [[Page 32401]] Studies have demonstrated that CMS continues to overvalue non-time- based services. In a pilot project for CMS conducted by the Urban Institute in 2016,\40\ which compared data obtained from electronic health records and direct observation, the ratios of fee schedule time to empirical time were often inflated, with the largest discrepancies in imaging and other test interpretations. In the study, the median ratio of PFS time to empiric intraservice physician time for CT and MRI scans was 2.13, for noninvasive cardiac testing was 4.00, and for mammography was 1.67. Another study compared estimated procedure time from anesthesia claims and the PFS time, and found that the mean estimated procedure time was 27 percent lower than the time used for PFS valuation.\41\ Expert reviewers have attributed some of the discrepancies to automation and personnel substitution that has become prevalent in the time between when CMS adopted many codes and when those codes are revalued.\42\ MedPAC, in their 2018 recommendations to Congress, recommended three options to offset these historic distortions, including passive devaluation: (1) an automatic reduction to the prices of new services and services with high growth rates; (2) an extension of the annual numeric target for CMS to reduce the prices of overpriced services; and (3) an across-the-board reduction to all fee schedule services other than ambulatory E&M services.\43\ For reasons we will further describe below in this section, we are proposing a modified version of this third option for procedures, radiology, and diagnostic tests. --------------------------------------------------------------------------- \40\ Zuckerman, S., K. Merrell, R. Berenson, et al. 2016. Collecting empirical physician time data: Piloting an approach for validating work relative value units. Report prepared for the Centers for Medicare & Medicaid Services. Washington, DC: The Urban Institute.https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Collecting-Empirical-Physician-Time-Data-Urban-Report.pdf. \41\ Crespin, Daniel, Teague Ruder, Andrew Mulcahy, Ateev Mehotra. ``Variation in Estimated Surgical Procedure Times Across Patient Characteristics and Surgeon Specialties.'' JAMA Surg. 2022 May 1;157(5):e220099. doi: 10.1001/jamasurg.2022.0099. \42\ Zuckerman et al, 2016. \43\ MedPAC Report to Congress, 2018. Chapter 3: Rebalancing Medicare's Physician Fee Schedule Toward Ambulatory Evaluation and Management Services.'' Available from: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun18_ch3_medpacreport_sec.pdf. --------------------------------------------------------------------------- Section 1848(c)(2)(B)(ii)(I) of the Act provides that the Secretary shall, to the extent he determines to be necessary, adjust the number of RVUs to take into account changes in medical practice. We believe that many of the efficiency gains that historically may not have been fully reflected in the valuation of work RVUs for non-time-based services represent or have been caused by changes in medical practice, as described in further detail below. To take into account changes in medical practice and better reflect the resources involved in furnishing services paid under the PFS, we are proposing to establish an efficiency adjustment to the work RVUs, as well as corresponding updates to the intraservice portion of physician time inputs for non- time-based services. Our initial proposed approach is designed to be conservative in nature, as we are concerned about making too many changes at once to the current methodology. In the future, we may consider making additional corresponding updates to the direct PE inputs for clinical labor and equipment costs. Our proposal is based on our assumption that both the intraservice portion of physician time and the work intensity (including mental effort, technical effort, physical effort, and risk of patient complications) would decrease as the practitioner develops expertise in performing the specific service. As expertise develops, learning leads to enhanced familiarity with the various aspects of a service, variations in the anatomy of each patient, and confidence in the practitioner's own ability to handle unexpected challenges that arise. For example, one cross-specialty observational study found that increased surgical experience was associated with significant reductions in operative time for coronary artery bypass grafting, total knee replacement, and bilateral reduction mammoplasty.\44\ While this expertise in part develops as a practitioner accumulates years of experience following the culmination of training, it also accumulates across the entire health system with the creation of a new procedure or service that practitioners must grow accustomed to. Furthermore, changes in medical practice such as enhancements in operational workflows and technology advancements after the introduction of a new procedure or service can further reduce the risk associated with the service and increase efficiencies. When a new surgical technique is introduced, operational workflows and procedures are based on previous experience with a similar service, which may not directly translate to the new procedure. These workflows generally evolve over time as experience grows, and tend to result in improvements, which make the service more efficient. This is consistent with systematic reviews demonstrating that with increased case volume and years of expertise, surgeons demonstrate decreased risk of poor outcomes.\45\ Other studies have found that with increased experience performing new procedures, clinicians demonstrate increased operational efficiency and decreased time. For example, one systematic review found that for clinicians newly introduced to robotic thoracic surgery, a reduction in operating time based on the increasing number of cases performed.\46\ Another study concluded that for robotic thoracic procedures, the hourly productivity increase for experienced and proficient surgeons ranged from 11.4 work relative value units/hour (+26%) for lobectomy to 17.0 work relative value units/hour (+50%) for segmentectomy.\47\ These changes in practitioner experience, operational workflows, and new technologies in totality represent large-scale, system-wide changes in medical practice as described in section 1848(c)(2)(B)(ii)(I) of the Act that may not have been previously accounted for in the valuation of non-time based codes. Given the relative infrequency of service revaluation under the PFS and the limitations of reliance on survey data, we are concerned that the RVUs we have established for codes paid under the PFS may not reflect these efficiencies accrued as practitioners gain experience, operational workflows improve, and new technology is adopted. --------------------------------------------------------------------------- \44\ Maruthappu, Mahiben, Antoine Duclos, Stuart Lipsitz, Dennis Orgill, Matthew Carty. ``Surgical Learning Curves and Operational Efficiency: A Cross-Specialty Observational Study.'' BMJ Open. 2015 Mar 13;5(3):e006679. \45\ https://pubmed.ncbi.nlm.nih.gov/25072442/. \46\ Power, Alexandra, Desmond D'Souza, Susan Moffatt-Bruce, Robert Merritt, Peter Kneuertz. ``Defining the Learning Curve of Robotic Thoracic Surgery: What Does it Take? Surg Endosc. 2019 Dec;33(12):3880-3888. doi: 10.1007/s00464-019-07035-y. Epub 2019 Aug 2. \47\ https://pubmed.ncbi.nlm.nih.gov/37562675/. --------------------------------------------------------------------------- (2) Proposed Methodology for the Efficiency Adjustment To calculate the efficiency adjustment, we propose using the Medicare Economic Index (MEI) productivity adjustment. The MEI is a measure of inflation faced by physicians with respect to their practice costs and general wage levels, and includes inputs used in furnishing physicians' services such as physician's own time, non-physician employees' compensation, rents, medical equipment, and more. Every year, the CMS Office of the [[Page 32402]] Actuary (OACT) subtracts the MEI productivity adjustment from the MEI percent change moving average to calculate the final MEI update. The MEI productivity adjustment used for the final MEI update reflects the most recent historical estimate of the 10-year moving average growth of private nonfarm business total factor productivity, as calculated by the Bureau of Labor Statistics.\48\ Every year, the productivity adjustment for the final MEI update is calculated by OACT based on historical data. For example, in 2026 the productivity adjustment for the final MEI update will reflect historical data through 2024. OACT incorporates a 10-year moving average to minimize yearly fluctuations in productivity associated with normal business cycles. The productivity adjustment to be applied to the proposed MEI percent change moving average for CY 2026 is listed in Table 11 (0.8 percent), and it will be updated for the final rule based on the most up to date data. The MEI productivity adjustment is substantively similar to the productivity adjustment required for the hospital inpatient prospective payment system (IPPS) and outpatient prospective payment system (OPPS) at sections 1886(b)(3)(B)(xi)(II) and 1833(t)(3)(F)(i) of the Act, respectively. The main difference is that the MEI productivity adjustment reflects historical data at the time of the CY update and the OPPS and IPPS productivity adjustments reflect a forecast to correspond to the FY update. --------------------------------------------------------------------------- \48\ 87 FR 69709. --------------------------------------------------------------------------- For CY 2026, we are proposing to apply the efficiency adjustment using a look-back period of 5 years. We considered a couple initial look-back periods. As previously described, despite the efforts to update valuation, many codes have never been revalued, and even for codes that have been revalued, there is, on average, more than 17 years since revaluation recommendations submitted by the RUC. Thus, using a look-back period of 17 years would help to account for the average amount of time that has elapsed since the last revaluation. However, using a look-back period of 17 years may be imprecise because, even when a code has been reviewed by the RUC, historic reliance on survey data may have skewed results and not properly accounted for efficiencies in the physician time and work RVU. We are also proposing to apply the efficiency adjustment to the codes that the RUC and CMS have reviewed within the look-back period of 5 years, including codes being proposed for revaluation this year, as many of the challenges discussed previously in this section, namely reliance on survey data, still apply. We realize that adjusting for the efficiencies gained would be a change in our payment methodology, and so as an initial conservative approach, we are proposing a look-back of 5 years. This represents our intended cadence for updating the efficiency adjustment (3 years), plus an additional 2 years, since it has historically taken about 2 years to make changes to PFS valuation after we receive new recommendations from the RUC. We recognize that over time, there may be variation in the efficiencies accrued service-by-service (for example, the previously cited research has identified that efficiencies have been gained more in minor procedures and radiology services than in major inpatient procedures). But because PFS intraservice time is higher than empirical intraservice time on average for studied non-time based services,49 50 we believe that applying the efficiency adjustment to non-time-based services more broadly, instead of applying it only to certain services that may be more likely to accrue efficiency gains, may help to improve the overall accuracy of our valuation of these services under the PFS. Furthermore, a look-back period of 5 years is not intended to account for the full magnitude of previously unaccounted for efficiency gains in services paid under the PFS, and we may consider making refinements to the efficiency adjustment in future rulemaking to better account for these gains. To implement this efficiency adjustment, we propose to decrease the work RVUs and make corresponding changes to the intraservice physician time for codes describing non-time-based services by a factor equal to the MEI productivity adjustment, equivalent to if this factor had been applied every year over the past 5 years. --------------------------------------------------------------------------- \49\ Zuckerman et al, 2016. \50\ Crespin, Daniel, Teague Ruder, Andrew Mulcahy, Ateev Mehotra. ``Variation in Estimated Surgical Procedure Times Across Patient Characteristics and Surgeon Specialties.'' JAMA Surg. 2022 May 1;157(5):e220099. doi: 10.1001/jamasurg.2022.0099. --------------------------------------------------------------------------- This methodology would yield a proposed efficiency adjustment of 2.5 percent, a downward (negative) adjustment for certain codes, for CY 2026. Given the 5-year look back period, the formula sums all productivity adjustments included in the final MEI updates from CY 2022-CY 2026. The CY 2026 productivity adjustment will be updated for the CY 2026 final rule to reflect more recent historical data from the Bureau of Labor Statistics. [GRAPHIC] [TIFF OMITTED] TP16JY25.016 Using the methodology described above, we have included Table A-E2, which outlines examples of two different CPT codes that would be subject to the proposed efficiency adjustment. Table 12 is intended only as an illustrative example. For more information on the impacts of this proposed policy, see the Regulatory Impact Analysis in section VII.C.2.c. of this proposed rule. [[Page 32403]] [GRAPHIC] [TIFF OMITTED] TP16JY25.017 We solicit comments on the initial look-back period and the use of the MEI productivity adjustment percentage values for calculation of the efficiency adjustment for 2026. We seek comments on whether adjustments should be made in future rulemaking to also adjust the direct PE inputs for clinical labor and equipment time that correspond with the physician time inputs. If finalized for CY 2026, we propose to apply the efficiency adjustment to the intraservice portion of physician time and work RVUs every 3 years. This timing would imply that the next efficiency adjustment after CY 2026 would be calculated and applied in CY 2029 PFS rulemaking, reflecting efficiency gains measured from 2027 through 2029. We are proposing to update and apply the proposed efficiency adjustment with a cadence of every 3 years to align with the other updates under the PFS, including updates to the Geographic Practice Cost Index (GPCI) and Malpractice (MP) RVUs, to allow for streamlining so that interested parties can expect updates on a similar timeframe. We also seek comments as to whether or not efficiencies stop accruing for services after a predefined number of years. We are proposing to apply this efficiency adjustment to non-time- based services that we expect to accrue efficiencies over time. We are proposing to apply the adjustment to all codes except time-based codes, including but not limited to, E/M visits, care management services, behavioral health services, services on the CMS telehealth list, and maternity codes with a global period of MMM. This adjustment would apply to all codes that are assigned a procedure status of A (active), B (bundled), C (contractor/carrier priced code), I (not valid for Medicare purposes), N (noncovered service by Medicare), R (restricted coverage), and T (injections), and are not otherwise excluded. Included code families represent the procedures, diagnostic tests, and radiology services that CMS expects to accrue efficiencies over time as changes in medical practice occur, including changes in clinician expertise, workflows, and technology. We seek comments on the codes expected to accrue efficiencies over time. The full descriptions of these indicators can be found in the Medicare Claims Processing Manual, Chapter 23 at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c23.pdf. Additionally, a list of the codes we are proposing to apply this adjustment to can be found under the Downloads section posted with this proposed rule at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices. Finally, we understand that accruing efficiencies does not apply equally to all services, and that efficiencies gained over time may often apply more to services that take less time to perform. Efficiencies gained in services that could be performed many times per day such as cataract extractions, skin biopsies, and CT scans, allow the practitioner to perform more of those services in a given day. We seek comments on whether and how we should consider additional efficiencies for services that require less time to perform. Additionally, we seek comments on whether the introduction of new artificial intelligence has or will lead to otherwise unaccounted for efficiencies gained in specific services. Going forward, we also propose that the public may submit nominations via the ``Potentially Misvalued Codes'' process, as described in section II.C. of this proposed rule, if they believe the efficiency adjustment will lead to inaccurate physician time and work RVUs for a particular code. Nominations submitted should include supporting information. For the reasons discussed previously in this section, we propose that CMS will place greater emphasis on ``empiric'' supporting information for the codes nominated, to avoid the limitations of using survey data. Proposed examples of empiric data may include electronic health record logs, operating room logs, and time- motion data and should be robust enough to achieve a high degree of assuredness as to accuracy and be inclusive of multiple types of practices (for example, inclusive of academic, health centers, and private practices wherever possible). We solicit comments on what kinds of data CMS should consider as valid, reliable, empiric information for this purpose.

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

a. Background On an annual basis, the RUC provides us with recommendations regarding PE inputs for new, revised, and potentially misvalued codes. We review the RUC-recommended direct PE inputs on a code-by-code basis. Like our review of recommended work RVUs, our review of recommended direct PE inputs generally includes, but is not limited to, a review of information provided by the RUC, HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, and consultation with physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. When we determine that the RUC's recommendations appropriately estimate the direct PE inputs (clinical labor, disposable supplies, and medical equipment) required for the typical service, are consistent with the principles of relativity, and reflect our payment policies, we use those direct PE inputs to value a service. If not, we refine the recommended PE inputs to better reflect our estimate of the PE resources required for the service. We also confirm whether CPT codes should have facility and/or nonfacility direct PE inputs and refine the inputs accordingly. Our review and refinement of the RUC-recommended direct PE inputs includes many refinements that are common across codes, as well as refinements that are specific to particular services. Table 20 details our refinements of the RUC's direct PE recommendations at the code- specific level. In section II.B. of this proposed rule, Determination of Practice Expense Relative Value Units (PE RVUs), we address certain refinements that will be common across codes. Refinements to particular codes are addressed in the [[Page 32404]] portions of that section that are dedicated to particular codes. We note that for each refinement, we indicate the impact on direct costs for that service. We note that, on average, in any case where the impact on the direct cost for a particular refinement is $0.35 or less, the refinement has no impact on the PE RVUs. This calculation considers both the impact on the direct portion of the PE RVU, as well as the impact on the indirect allocator for the average service. In this proposed rule, we also note that many of the refinements listed in Table 20 result in changes under the $0.35 threshold and would be unlikely to result in a change to the RVUs. We note that the direct PE inputs for CY 2026 are displayed in the CY 2026 direct PE input files, available on the CMS website under the downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The inputs displayed there have been used in developing the CY 2026 PE RVUs as displayed in Addendum B (see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates). b. Common Refinements (1) Changes in Work Time Some direct PE inputs are directly affected by revisions in work time. Specifically, changes in the intraservice portions of the work time and changes in the number or level of postoperative visits associated with the global periods result in corresponding changes to direct PE inputs. The direct PE input recommendations generally correspond to the work time values associated with services. We believe that inadvertent discrepancies between work time values and direct PE inputs should be refined or adjusted in the establishment of proposed direct PE inputs to resolve the discrepancies. (2) Equipment Time Prior to CY 2010, the RUC did not generally provide CMS with recommendations regarding equipment time inputs. In CY 2010, in the interest of ensuring the greatest possible degree of accuracy in allocating equipment minutes, we requested that the RUC provide equipment times along with the other direct PE recommendations, and we provided the RUC with general guidelines regarding appropriate equipment time inputs. We appreciate the RUC's willingness to provide us with these additional inputs as part of its PE recommendations. In general, the equipment time inputs correspond to the service period portion of the clinical labor times. We clarified this principle over several years of rulemaking, indicating that we consider equipment time as the time within the intraservice period when a clinician is using the piece of equipment plus any additional time that the piece of equipment is not available for use for another patient due to its use during the designated procedure. For those services for which we allocate cleaning time to portable equipment items, because the portable equipment does not need to be cleaned in the room where the service is furnished, we do not include that cleaning time for the remaining equipment items, as those items and the room are both available for use for other patients during that time. In addition, when a piece of equipment is typically used during follow-up postoperative visits included in the global period for a service, the equipment time will also reflect that use. We believe that certain highly technical pieces of equipment and equipment rooms are less likely to be used during all of the preservice or postservice tasks performed by clinical labor staff on the day of the procedure (the clinical labor service period) and are typically available for other patients even when one member of the clinical staff may be occupied with a preservice or postservice task related to the procedure. We also noted that we believe these same assumptions will apply to inexpensive equipment items that are used in conjunction with and located in a room with non-portable highly technical equipment items since any items in the room in question will be available if the room is not being occupied by a particular patient. For additional information, in that rule we referred readers to our discussion of these issues in the CY 2012 PFS final rule with comment period (76 FR 73182) and the CY 2015 PFS final rule with comment period (79 FR 67639). (3) Standard Tasks and Minutes for Clinical Labor Tasks In general, the preservice, intraservice, and postservice clinical labor minutes associated with clinical labor inputs in the direct PE input database reflect the sum of particular tasks described in the information that accompanies the RUC-recommended direct PE inputs, commonly called the ``PE worksheets.'' For most of these described tasks, there is a standardized number of minutes, depending on the type of procedure, its typical setting, its global period, and the other procedures with which it is typically reported. The RUC sometimes recommends a number of minutes either greater than or less than the time typically allotted for certain tasks. In those cases, we review the deviations from the standards and any rationale provided for the deviations. When we do not accept the RUC-recommended exceptions, we refine the proposed direct PE inputs to conform to the standard times for those tasks. In addition, in cases when a service is typically billed with an E/M service, we remove the preservice clinical labor tasks to avoid duplicative inputs and to reflect the resource costs of furnishing the typical service. We refer readers to section II.B. of this proposed rule, Determination of Practice Expense Relative Value Units (PE RVUs), for more information regarding the collaborative work of CMS and the RUC in improvements in standardizing clinical labor tasks. (4) Recommended Items That Are Not Direct PE Inputs In some cases, the PE worksheets included with the RUC's recommendations include items that are not clinical labor, disposable supplies, or medical equipment or that cannot be allocated to individual services or patients. We addressed these kinds of recommendations in previous rulemaking (78 FR 74242), and we do not use items included in these recommendations as direct PE inputs in the calculation of PE RVUs. (5) New Supply and Equipment Items The RUC generally recommends the use of supply and equipment items that already exist in the direct PE input database for new, revised, and potentially misvalued codes. However, some recommendations include supply or equipment items that are not currently in the direct PE input database. In these cases, the RUC has historically recommended that a new item be created and has facilitated our pricing of that item by working with the specialty societies to provide us copies of sales invoices. For CY 2026 we received invoices for several new supply and equipment items. Tables 20 and 21 detail the invoices received for new and existing items in the direct PE database. As discussed in section II.B. of this proposed rule, Determination of Practice Expense Relative Value Units, we encourage interested parties to review the prices associated with these new and existing items to determine whether these prices appear to be accurate. Where prices appear inaccurate, we encourage interested parties to submit invoices or other information to improve the accuracy of [[Page 32405]] pricing for these items in the direct PE database by February 10th of the following year for consideration in future rulemaking, similar to our process for consideration of RUC recommendations. We remind interested parties that due to the relativity inherent in the development of RVUs, reductions in existing prices for any items in the direct PE database increase the pool of direct PE RVUs available to all other PFS services. Tables 20 and 21 also include the number of invoices received and the number of nonfacility allowed services for procedures that use these equipment items. We provide the nonfacility allowed services so that interested parties will note the impact the particular price may have on PE relativity, as well as to identify items that are used frequently, since we believe that interested parties are more likely to have better pricing information for items used more frequently. A single invoice may not be reflective of typical costs, and we encourage interested parties to provide additional invoices so that we might identify and use accurate prices in the development of PE RVUs. In some cases, we do not use the price listed on the invoice that accompanies the recommendation because we identify publicly available alternative prices or information that suggests a different price is more accurate. In these cases, we include this in the discussion of these codes. In other cases, we cannot adequately price a newly recommended item due to inadequate information. Sometimes, no supporting information regarding the price of the item has been included in the recommendation. In other cases, the supporting information does not demonstrate that the item has been purchased at the listed price (for example, vendor price quotes instead of paid invoices). In cases where the information provided on the item allows us to identify clinically appropriate proxy items, we might use existing items as proxies for the newly recommended items. In other cases, we include the item in the direct PE input database without any associated price. Although including the item without an associated price means that the item does not contribute to the calculation of the final PE RVU for particular services, it facilitates our ability to incorporate a price once we obtain information and are able to do so. (6) Service Period Clinical Labor Time in the Facility Setting Generally speaking, our direct PE inputs do not include clinical labor minutes assigned to the service period because the cost of clinical labor during the service period for a procedure in the facility setting is not considered a resource cost to the practitioner since Medicare makes separate payment to the facility for these costs. We address code-specific refinements to clinical labor in the individual code sections. (7) Procedures Subject to the Multiple Procedure Payment Reduction (MPPR) and the OPPS Cap We note that the list of services for the upcoming calendar year that are subject to the MPPR on diagnostic cardiovascular services, diagnostic imaging services, diagnostic ophthalmology services, and therapy services; and the list of procedures that meet the definition of imaging under section 1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap; are displayed in the public use files for the PFS proposed and final rules for each year. The public use files for CY 2026 are available on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. For more information regarding the history of the MPPR policy, we referred readers to the CY 2014 PFS final rule with comment period (78 FR 74261 through 74263). Effective January 1, 2007, section 5102(b)(1) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171, enacted on February 8, 2006) amended section 1848(b)(4) of the Act to require that, for imaging services, if--(i) The TC (including the TC portion of a global fee) of the service established for a year under the fee schedule without application of the geographic adjustment factor, exceeds (ii) The Medicare OPD fee schedule amount established under the prospective payment system (PPS) for HOPD services under section 1833(t)(3)(D) of the Act for such service for such year, determined without regard to geographic adjustment under section 1833(t)(2)(D) of the Act, the Secretary shall substitute the amount described in clause (ii), adjusted by the geographic adjustment factor under the PFS, for the fee schedule amount for such TC for such year. As required by section 1848(b)(4)(A) of the Act, for imaging services furnished on or after January 1, 2007, we cap the TC of the PFS payment amount for the year (prior to geographic adjustment) by the Outpatient Prospective Payment System (OPPS) payment amount for the service (prior to geographic adjustment). We then apply the PFS geographic adjustment to the capped payment amount. Section 1848(b)(4)(B) of the Act defines imaging services as ``imaging and computer-assisted imaging services, including X-ray, ultrasound (including echocardiography), nuclear medicine (including PET), magnetic resonance imaging (MRI), computed tomography (CT), and fluoroscopy, but excluding diagnostic and screening mammography.'' For more information regarding the history of the cap on the TC of the PFS payment amount under the DRA (the ``OPPS cap''), we referred readers to the CY 2007 PFS final rule with comment period (71 FR 69659 through 69662). For CY 2026, we identified new and revised codes to determine which services meet the definition of ``imaging services'' as defined at section 1848(b)(4)(B) of the Act for purposes of this cap. Beginning for CY 2026, we are proposing to include the following services on the list of codes to which the OPPS cap applies: CPT codes 0598T (Real-time fluorescence wound imaging with clinical darkness, to identify location of bacterial wound pathogens and measure wound size, per session; first anatomic site (e.g., lower extremity, right leg), 0599T (Real-time fluorescence wound imaging with clinical darkness, to identify location of bacterial wound pathogens and measure wound size, per session; each additional anatomic site (e.g., upper extremity, left leg) (List separately in addition to code for primary procedure)), 0944T (3D contour simulation of target liver lesion(s) and margin(s) for image- guided percutaneous microwave ablation), 0946T (Orthopedic implant movement analysis using paired computed tomography (CT) examination of the target structure, including data acquisition, data preparation and transmission, interpretation and report (including CT scan of the joint or extremity performed with paired views)), 0961T (Shortwave infrared radiation imaging, surgical pathology specimen, to assist gross examination for lymph node localization in fibroadipose tissue, per specimen (List separately in addition to code for primary procedure)), 0972T (Assistive algorithmic classification of burn healing (i.e., healing or nonhealing) by noninvasive multispectral imaging, including system set-up and acquisition, selection, and transmission of images, with automated generation of report), 0984T (Intravascular imaging of extracranial cerebral vessels using optical coherence tomography (OCT) during diagnostic evaluation and/or therapeutic intervention, including all associated radiological supervision, [[Page 32406]] interpretation, and report; initial vessel (List separately in addition to code for primary procedure)), 0985T (Intravascular imaging of extracranial cerebral vessels using optical coherence tomography (OCT) during diagnostic evaluation and/or therapeutic intervention, including all associated radiological supervision, interpretation, and report; each additional vessel (List separately in addition to code for primary procedure)), 0986T (Intravascular imaging of intracranial cerebral vessels using optical coherence tomography (OCT) during diagnostic evaluation and/or therapeutic intervention, including all associated radiological supervision, interpretation, and report; initial vessel (List separately in addition to code for primary procedure)), 0987T (Intravascular imaging of intracranial cerebral vessels using optical coherence tomography (OCT) during diagnostic evaluation and/or therapeutic intervention, including all associated radiological supervision, interpretation, and report; each additional vessel (List separately in addition to code for primary procedure)), 70XX1 (Computed tomographic angiography (CTA), head and neck, with contrast material(s), including noncontrast images, when performed, and image postprocessing), 70XX2 (Computed tomographic (CT) cerebral perfusion analysis with contrast material(s), including image postprocessing performed with concurrent CT or CT angiography of the same anatomy (List separately in addition to code for primary procedure)), 70XX3 (Computed tomographic (CT) cerebral perfusion analysis with contrast material(s), including image postprocessing performed without concurrent CT or CT angiography of the same anatomy), and 77X09 (Surface radiation therapy; superficial or orthovoltage, image guidance, ultrasound for placement of radiation therapy fields for treatment of cutaneous tumors, per course of treatment (List separately in addition to the code for primary procedure)). We believe that these codes meet the definition of imaging services under section 1848(b)(4)(B) of the Act, and thus, should be subject to the OPPS cap.

4. Valuation of Specific Codes for CY 2026

(1) Tympanostomy (CPT Code 0583T) In the CY 2025 PFS final rule (89 FR 97745 through 97746), we reviewed Category III CPT code 0583T (Tympanostomy (requiring insertion of ventilating tube), using an automated tube delivery system, iontophoresis local anesthesia) as potentially misvalued. We considered whether to establish national payment for CPT code 0583T, which is used to report tympanostomy using the TULA system, or whether to create a device-agnostic G-code which could be used to report tympanostomies using the TULA or other devices. We stated that CPT code 69433 (Tympanostomy (requiring insertion of ventilating tube), local or topical anesthesia) might serve as a sufficient base code, adequately describing most of the surgeon's work and facility resources. In response to comments supporting the latter approach, we established separate payment for HCPCS code G0561 (Tympanostomy with local or topical anesthesia and insertion of a ventilating tube when performed with tympanostomy tube delivery device, unilateral (List separately in addition to 69433) (Do not use in conjunction with 0583T)) to be billed with CPT code 69433 in order to describe the additional resource costs associated with using the innovative tympanostomy tube delivery devices and/or systems falling under emerging technology and services categories and finalized contractor pricing for CY 2025. We have received input from interested parties expressing gratitude for the creation of HCPCS code G0561 but also continuing to request that CMS establish national pricing for CPT code 0583T. In response, we are seeking comments on whether to nationally price both codes, and what inputs for physician work, time, and direct practice expense would most accurately capture the resource costs associated with performing both procedures. For example, in response to a similar request for comment in CY 2025 PFS rulemaking, commenters recommended a direct crosswalk to the values associated with CPT code 31295 (Nasal/sinus endoscopy, surgical, with dilation (e.g., balloon dilation); maxillary sinus ostium, transnasal or via canine fossa) which they stated was similar to CPT code 0583T with respect to the intensity and invasiveness of the procedure, preparation time for the procedure, and total time to complete the surgery. We are seeking comments on whether interested parties continue to believe CPT code 31295 would be an accurate comparison or whether there are other services that CMS should consider. (2) Temporary Female Intraurethral Valve-Pump (CPT Codes 0596T and 0597T) For the CY 2025 PFS final rule (89 FR 97710), we reviewed CPT codes 0596T (Temporary female intraurethral valve-pump (i.e., voiding prosthesis); initial insertion, including urethral measurement) and 0597T (Temporary female intraurethral valve-pump (that is, voiding prosthesis); initial insertion, replacement) as potentially misvalued. We added pricing for 3 new supplies related to these services: (1) inFlow Measuring Device, (2) inflow Valve Pump Device, and (3) inFlow Activator Kit. The RUC reviewed and surveyed these codes as potentially misvalued for the January 2025 meeting and stated that they would flag for the RAW in 3 years. We are proposing the RUC-recommended work RVU of 2.43 for CPT code 0596T and the RUC-recommended work RVU of 1.05 for CPT code 0597T. We are proposing the RUC-recommended direct PE inputs for both CPT codes without refinement. (3) Limb Lengthening-Shortening--Femur (CPT Codes 27465, 27466, 27468, and 27XX0) The CPT Editorial Panel created a new Category I code, CPT code 27XX0 (Osteotomy(ies), femur, unilateral, with insertion of an externally controlled intramedullary lengthening device, including iliotibial band release when performed, imaging, alignment assessments, computations of adjustment schedules, and management of the intramedullary lengthening device) in May 2024. This code describes femur lengthening using the insertion of an externally controlled intramedullary lengthening device, including imaging. CPT code 27XX0 and the other codes within this code family, including CPT codes 27465 (Osteoplasty, femur; shortening (excluding 64876), 27466 (Osteoplasty, femur; lengthening), and 27468 (Osteoplasty, femur; combined, lengthening and shortening with femoral segment transfer), were surveyed during the September 2024 RUC Meeting. We are proposing the RUC-recommended work RVUs of 26.65, 21.13, and 22.65 for CPT codes 27XX0, 27465, and 27466, respectively. We are also proposing the direct PE inputs for CPT codes 27XX0, 27465, and 27466 without refinement. However, for CPT code 27468, we disagree with the RUC's recommendation to contractor price this code. We believe CPT code 27468 is valued appropriately and should not be paid under contractor pricing based on the results of ten surveys. We are instead proposing to maintain the current work RVU and direct PE inputs for CPT code 27468 for CY 2026. [[Page 32407]] (4) Limb Lengthening-Shortening--Tibia (CPT Codes 27715 and 27XX1) The CPT Editorial Panel created a new Category I code, CPT code 27XX1, (Osteotomy(ies), tibia, including fibula when performed, unilateral, with insertion of an externally controlled intramedullary lengthening device, including imaging, alignment assessments, computations of adjustment schedules, and management of the intramedullary lengthening device) in May 2024. This code describes tibia lengthening using the insertion of an externally controlled intramedullary lengthening device, including imaging. CPT codes 27XX1 and 27715 (Osteoplasty, tibia and fibula, lengthening or shortening) were surveyed for the September 2024 RUC Meeting. We are proposing the RUC-recommended work RVU of 28.00 for CPT code 27XX1 and the work RVU of 22.50 for CPT 27715. We are also proposing the direct PE inputs for CPT codes 27XX1 and 27715 without refinement. (5) Arthrodesis Great Toe (CPT Codes 28750 and 28755) At the April 2024 Relativity Assessment Workgroup (RAW), the RAW identified CPT code 28750 (Arthrodesis, great toe; metatarsophalangeal joint) on the ``different performing specialty from survey screen,'' where the top specialty performing over 50 percent of the Medicare claims did not survey the service or the top two specialties did not survey the service. The RAW noted that when this service was last valued in 1995, podiatry, which now performs over half of the volume for this service, was not involved in the survey. CPT code 28755 (Arthrodesis, great toe; interphalangeal joint) which was valued by the Harvard Studies and never surveyed by the RUC, was added as part of the code family. CPT codes 28750 and 28755, were surveyed at the January 2025 AMA RUC meeting. We are proposing the RUC-recommended work RVU of 8.75 for CPT code 28750. We disagree with the RUC-recommended work RVU of 7.50 for CPT code 28755 and we are instead proposing a work RVU of 6.76. The RUC- recommended valuation would place it above the median range when compared to other 90-day global codes with similar work times and the current time and work values. We are proposing a work RVU of 6.76 for CPT code 28755 based on a direct crosswalk to CPT code 28122 (Partial excision (craterization, saucerization, sequestrectomy, or diaphysectomy) bone (for example, osteomyelitis or bossing); tarsal or metatarsal bone, except talus or calcaneus). CPT code 28122 shares the same intraservice work time of 45 minutes as compared with CPT code 28755, it has a very similar total time (230 minutes as compared with 234 minutes), and both of these codes also contain four postoperative office visits in their global periods. We are supporting this proposed work RVU of 6.76 with the total time ratio for CPT code 28755, which calculates at a work RVU of 6.64 (the total time is increasing from 172 minutes to 234 minutes for an increase of 36 percent, which results in a work RVU of 6.64 when multiplied with the current work RVU of 4.88 for CPT code 28755). Our proposed work RVU of 6.76 is further supported by a pair of other 90-day global codes with similar work time values, with a lower bracket of CPT code 26785 (Open treatment of interphalangeal joint dislocation, includes internal fixation, when performed, single) at a work RVU of 6.60 and an upper bracket of CPT code 56620 (Vulvectomy simple; partial) at an RVU of 7.53. We are proposing the RUC-recommended direct PE inputs for all of the codes in this family. (6) Closure Left Atrial Appendage With Endocardial Implant (CPT Code 33340) The Relativity Assessment Workgroup (RAW) reviewed CPT code 33340 (Percutaneous transcatheter closure of the left atrial appendage with endocardial implant, including fluoroscopy, transseptal puncture, catheter placement(s), left atrial angiography, left atrial appendage angiography, when performed, and radiological supervision and interpretation) in 2023 as part of the new technology/service screen. Around that same time, specialty societies asserted that this service was undergoing rapid change. Therefore, the RAW recommended specialty societies conduct a survey for the April 2024 RUC meeting. We are proposing the RUC-recommended work RVU of 10.25 for CPT code 33340. We are also proposing the RUC-recommended direct PE inputs for CPT code 33340 without refinement. (7) Thoracic Branch Endograft Services (CPT Codes 33880, 33881, 33883, 33886, 33XX2, and 35XX1) At the September 2024 CPT Editorial Panel meeting, CPT approved endovascular repair of thoracic aortic aneurysms (TEVAR) coding changes. CPT deleted three codes describing the procedure and replaced them with two new codes and four revised codes in the TEVAR family. These revisions update the TEVAR code family to more accurately describe the current practice and current coding standards. The new codes are CPT code 33XX2 (Endovascular repair of the thoracic aorta by deployment of a branched endograft multipiece system involving an aorto-aortic tube device with a fenestration for the left subclavian artery stentgraft(s) and all aortic tube endograft extension(s) placed from the level of the left common carotid artery to the celiac artery, including preprocedure sizing and device selection, all target zone angioplasty, all nonselective catheterization(s) and left subclavian artery selective catheterization(s), all associated radiological supervision and interpretation), CPT code 35XX1 (Bypass graft, with other than vein; carotid-contralateral carotid), CPT code 33880 (Endovascular repair of descending thoracic aorta (e.g., aneurysm, pseudoaneurysm, dissection, penetrating ulcer, intramural hematoma, or traumatic disruption); involving coverage of left subclavian artery origin, initial endoprosthesis plus descending thoracic aortic extension(s), if required, to level of celiac artery origin, radiological supervision and interpretation), CPT code 33881 (by deployment of an aorto-aortic tube endograft not involving coverage of the left subclavian artery origin and all endograft extension(s) placed from the level of the left subclavian carotid artery to the celiac artery), CPT code 33883 (Proximal extension prosthesis(s) not involving coverage of the left subclavian artery origin, delayed placement after endovascular repair of the thoracic aorta, including preprocedure sizing and device selection, nonselective catheterization(s), all associated radiological supervision and interpretation, and treatment zone angioplasty/stenting, when performed), and CPT code 33886 (Distal extension prosthesis(s) from the level of the left subclavian artery to the celiac artery, delayed placement after endovascular repair of descending thoracic aorta, including preprocedure sizing and device selection, all nonselective catheterization(s), all associated radiological supervision and interpretation). The new codes in this code family were surveyed at the January 2025 AMA RUC meeting. The RUC surveyed this code family and there were overall decreases in the work times. The RUC-recommended work RVUs do not appear to fully [[Page 32408]] account for these decreases. Although we do not believe that changes in work time as reflected in survey values must equate to a one-to-one or linear change in the valuation of work RVUs, we believe that since the two components of work are time and intensity, decreases in the surveyed work time should typically be reflected in decreases to the work RVU. We reviewed the RUC recommendations and found them to be high, relative to other codes with the same or similar times. Based on a search of similarly timed codes in the RUC database, the RUC- recommended values exceed the work RVUs for five of the six codes. We disagree with the RUC recommended work RVU of 30.00 for CPT code 33880 and we are instead proposing a work RVU of 27.00. This valuation was higher than nearly all of the other 90-day global codes with similar time values. We found that the RUC-recommended work RVU does not maintain relativity with other 90-day global period codes with an intraservice time of 120 minutes and similar total time around 546 minutes. We are instead proposing a direct crosswalk to CPT code 32672 (Thoracoscopy, surgical; with resection-plication for emphysematous lung (bullous or non-bullous) for lung volume reduction (LVRS), unilateral includes any pleural procedure, when performed) at the previously mentioned work RVU of 27.00. CPT code 32672 shares the same intraservice work time of 120 minutes as compared with CPT code 33880, it has a similar total time (567 minutes as compared with 546 minutes), and both of these codes each have two postoperative office visits in their global periods. We are supporting this proposed work RVU of 27.00 with a pair of other 90-day global codes with similar work time values, with a lower bracket of CPT code 43820 (Gastrojejunostomy; without vagotomy) at a work RVU of 22.53 and an upper bracket of CPT code 34702 (Endovascular repair of infrarenal aorta by deployment of an aorto- aortic tube endograft including pre-procedure sizing and device selection, all nonselective catheterization(s), all associated radiological supervision and interpretation, all endograft extension(s) placed in the aorta from the level of the renal arteries to the aortic bifurcation, and all angioplasty/stenting performed from the level of the renal arteries to the aortic bifurcation; for rupture including temporary aortic and/or iliac balloon occlusion, when performed (for example, for aneurysm, pseudoaneurysm, dissection, penetrating ulcer, traumatic disruption)) with a work RVU of 36.00. We disagree with the RUC recommended work RVU of 26.75 for CPT code 33881 and we are instead proposing a work RVU of 22.53. The RUC's recommended work RVUs do not match the surveyed drops in work time (from 200 minutes to 110 minutes for CPT code 33881) and we are therefore selecting a crosswalk code that more accurately captures this decrease in the surveyed times. CPT code 43820 has a slightly higher intraservice work time of 120 minutes as compared with CPT code 33881 which has 110 minutes, it has a very similar total time (545 minutes as compared with 506 minutes), and three postoperative office visits as compared to CPT code 33881 which has two postoperative office visits in the global period. We are supporting this proposed work RVU of 22.53 with a pair of other 90-day global codes with similar work time values, with a lower bracket of CPT code 34707 at a work RVU of 22.28 and an upper bracket of CPT code 43880 at an RVU of 27.18. We disagree with the RUC recommended work RVU of 39.00 for CPT code 33XX2 and we are instead proposing a work RVU of 35.00. We found that the RUC-recommended work RVU does not maintain relativity with other 90-day global period codes with the same intraservice time of 180 minutes and similar total time around 621 minutes. We are proposing a work RVU of 35.00 for CPT code 33XX2 based on a direct crosswalk to CPT code 33390 (Valvuloplasty, aortic valve, open, with cardiopulmonary bypass; simple (i.e., valvotomy, debridement, debulking, and/or simple commissural resuspension)). There were several recently reviewed codes in the RUC database search that have the exact same intraservice time with higher total times and a lower work RVU. CPT code 33390 shares the same intraservice work time of 180 minutes as compared with CPT code 33880, it has a very similar total time (621 minutes as compared with 622 minutes), and both of these codes also contain two postoperative office visits in their global periods. We are supporting this proposed work RVU with a pair of other 90-day global codes with similar work time values, with a lower bracket of CPT code 33647 (Repair of atrial septal defect and ventricular septal defect, with direct or patch closure) at a work RVU of 33.00 and an upper bracket of CPT code 35216 (Repair blood vessel, direct; intrathoracic, without bypass) at an RVU of 35.00. We disagree with the RUC recommended work RVU of 24.25 for CPT code 33883 and we are instead proposing a work RVU of 19.91. We found that the RUC-recommended work RVU does not maintain relativity with other 90-day global period codes with the same intraservice time of 90 minutes and similar total time around 486 minutes. We are proposing a work RVU of 19.91 for CPT code 33883 based on a direct crosswalk to CPT code 44320 (Colostomy or skin level cecostomy). The RUC-recommended work RVUs do not match the surveyed drops in work time (from 120 minutes to 90 minutes) for CPT code 33883 and we are therefore selecting a crosswalk code that more accurately captures this decrease in the surveyed times. CPT code 44320 shares the same intraservice work time of 90 minutes as compared with CPT code 33883, it has a slightly higher total time (507 minutes as compared with 486 minutes), and three postoperative office visits as compared to two post operative office visits for CPT code 33883 in the global period. We are supporting this proposed work RVU of 19.91 with a pair of other 90-day global codes with similar work time values, with a lower bracket of CPT code 33267 (Exclusion of left atrial appendage, open, any method (for example, excision, isolation via stapling, oversewing, ligation, plication, clip)) at a work RVU of 18.50 and an upper bracket of CPT code 43611 (Excision, local; malignant tumor of stomach) at an RVU of 20.38. We disagreed with the RUC recommended work RVU of 23.50 for CPT code 33886 and we are instead proposing a work RVU of 19.91. We found that the RUC-recommended work RVU does not maintain relativity with other 90-day global period codes with the same intraservice time of 90 minutes and similar total time around 486 minutes. We are proposing a work RVU of 19.91 for CPT code 33886 based on a direct crosswalk to CPT code 44320. The RUC-recommended work RVUs do not match the surveyed drops in work time (from 100 minutes to 90 minutes) for CPT code 33886 and we are therefore selecting a crosswalk code that more accurately captures this decrease in the surveyed times. CPT code 44320 shares the same intraservice work time of 90 minutes as compared with CPT codes 33886, it has a slightly higher total time (507 minutes as compared with 486 minutes), and three postoperative office visits as compared to two post operative office visits for CPT code 33886 in the global period. We are supporting this proposed work RVU of 19.91 with a pair of other 90-day global codes with [[Page 32409]] similar work time values, with a lower bracket of CPT code 33267 at a work RVU of 18.50 and an upper bracket of CPT code 43611 at an RVU of 20.38. We disagree with the RUC recommended work RVU of 27.40 for CPT code 35XX1 and we are instead proposing a work RVU of 23.53. We found that the RUC-recommended work RVU does not maintain relativity with other 90-day global period codes with the same intraservice time of 150 minutes and similar total time around 486 minutes. Furthermore, we note that there was a decrease in the intraservice time by 23 minutes and the intraservice time ratio for this code suggests that the RUC- recommendation is too high. We are proposing a work RVU of 23.53 for CPT code 35XX1 based on a direct crosswalk to CPT code 32669 (Thoracoscopy, surgical; with removal of a single lung segment (segmentectomy)). We note that CPT code 35XX1 was also valued by the RUC using a crosswalk code to maintain relativity within the family. The RUC's recommended work RVUs do not reflect surveyed drops in work time (from 173 minutes to 150 minutes) for CPT code 35XX1and we are therefore selecting a crosswalk code that more accurately captures this decrease in the surveyed times. CPT code 32669 shares the same intraservice work time of 150 minutes as compared with CPT code 35XX1, it has a slightly higher total time (502 minutes as compared with 486 minutes), and both of these codes also contain two postoperative office visits in their global periods. We are supporting this proposed work RVU of 23.53 with a pair of other 090-day global codes with similar work time values, with a lower bracket of CPT code 22612 (Arthrodesis, posterior or posterolateral technique, single interspace; lumbar (with lateral transverse technique, when performed)) at a work RVU of 23.53 and an upper bracket of CPT code 35666 (Bypass graft, with other than vein; femoral-anterior tibial, posterior tibial, or peroneal artery) at an RVU of 23.66. We are proposing the RUC-recommended direct PE inputs for all the codes in this family. (8) Lower Extremity Revascularization (CPT Codes 37XX1, 37X02, 37X03, 37X04, 37X05, 37X06, 37X07, 37X08, 37X09, 37X10, 37X11, 37X12, 37X13, 37X14, 37X15, 37X16, 37X17, 37X18, 37X19, 37X20, 37X21, 37X22, 37X23, 37X24, 37X25, 37X26, 37X27, 37X28, 37X29, 37X30, 37X31, 37X32, 37X33, 37X34, 37X35, 37X36, 37X37, 37X38, 37X39, 37X40, 37X41, 37X42, 37X43, 37X44, 37X45, and 37X46) In October 2018, three CPT codes (37225, 37227, and 37229) were flagged by the Relativity Assessment Workgroup for high-cost supplies review, leading to a series of significant changes in the lower extremity revascularization (LER) code family. After multiple reviews and discussions between 2018 and 2024, the CPT Editorial Panel ultimately created four new subsections and 46 new codes to replace the existing 16 codes (CPT codes 37220-37235) for LER services. According to the RUC, this comprehensive update was driven by technological advances, changes in practice settings, and the need to better differentiate between a stenosis (i.e. a straightforward lesion) and an occlusion (that is, a complex lesion) procedures. These codes were surveyed for the September 2024 RUC meeting and recommendations submitted to CMS for consideration in the CY 2026 PFS proposed rule. See table 13 for a summary of the codes, and their long descriptors. According to the RUC, not all codes received a full survey from participants. Eleven selected core codes had complete survey responses from all respondents, while the remaining 35 codes underwent an abbreviated survey process. The 35 abbreviated survey codes were split into two groups and survey respondents only received one of those two groups along with the 11 core codes. There were two notable changes made to the abbreviated survey. First, survey respondents were provided with one of the anchor codes as a comparator instead of using a reference service list; second, survey respondents were only asked one question per abbreviated code in the intensity/complexity section. Therefore, respondents did not complete all elements of the abbreviated survey, as some elements were pre-populated. We note that this method could potentially introduce inaccuracies and bias in the survey outcomes. For CY 2026, we are proposing the RUC-recommended work RVUs for all 46 CPT codes. However, we have concerns about the survey data, specifically regarding the small sample size and large variations in responses. We encourage commenters to submit additional data for our consideration in determining the valuation of work and direct PE inputs for these CPT codes. Table 13 also shows the proposed work RVUs for the 46 CPT codes: [[Page 32410]] [GRAPHIC] [TIFF OMITTED] TP16JY25.018 [[Page 32411]] [GRAPHIC] [TIFF OMITTED] TP16JY25.019 [[Page 32412]] [GRAPHIC] [TIFF OMITTED] TP16JY25.020 [[Page 32413]] [GRAPHIC] [TIFF OMITTED] TP16JY25.021 [[Page 32414]] [GRAPHIC] [TIFF OMITTED] TP16JY25.022 [[Page 32415]] [GRAPHIC] [TIFF OMITTED] TP16JY25.023 [[Page 32416]] [GRAPHIC] [TIFF OMITTED] TP16JY25.024 We are proposing the RUC-recommended PE inputs for all 46 CPT codes, with several revisions to address discrepancies found in the documentation. Regarding the drug-coated balloon (SD382), which is priced at $2,343.33, the RUC recommendations show inconsistent quantity allocations across different code sets. The RUC documentation specifies two units for the initial vessel and one unit for additional vessels in CPT codes 37X10--37X13 and 37X18--37X21. However, for CPT codes 37X14-- 37X15 and 37X22--37X23, only one unit is listed for the initial vessel. Furthermore, CPT codes 37X16--37X17 and 37X24--37X26 have no quantity values specified at all. To address these inconsistencies, we propose updating the initial vessel quantities to one unit of the SD382 drug- coated balloon for CPT codes 37X10, 37X12, 37X18, and 37X20, while maintaining one unit for additional vessels. The RUC recommends a quantity of two for supply code SD379 (drug eluting stent, tibial) for four CPT codes in the tibial and peroneal vascular territory, CPT codes 37X33, 37X34, 37X41, and 37X42. The RUC- recommended quantity exceeds the number of units of supply code SD266 (stent, self-expanding 2-5 mm XPERT (Abbott)) currently used in CPT code 37230, 37234, 37231, and 37235, respectively. We are proposing to reduce the quantity from two to one for supply code SD379 (drug eluting stent, tibial) in each of the four CPT codes 37X33, 37X34, 37X41, and 37X42. For this code family, the RUC recommended 34 minutes of equipment time for the Professional PACS Workstation (ED053). We believe this recommendation contains an unintended technical error regarding the equipment time. Therefore, we propose using the standard equipment formula for the professional PACS workstation, which calculates equipment minutes as the sum of intraservice work time plus half of the preservice work time. While we are proposing the listed refinements above, we are seeking comments on whether we should create G-codes to describe the use of high-cost supplies. Alternatively, we are seeking comments on whether we could use the Hospital Outpatient Prospective Payment System (OPPS) mean unit cost data (MUC) to accurately price these services and their supplies based on how these supplies are paid for in the hospital setting. We seek comments on whether there is additional information we should consider in establishing proposed payments for these services. (9) Irreversible Electroporation of Tumors (CPT Codes 4001X and 5XX11) At the September 2024 CPT Editorial Panel Meeting, two new CPT codes were created for reporting percutaneous irreversible electroporation ablation of one or more tumors: CPT codes 4001X (Ablation, irreversible electroporation, liver, 1 or more tumors, including imaging guidance, percutaneous) and 5XX11 (Ablation, irreversible electroporation, prostate, 1 or more tumors, including imaging guidance, percutaneous). These new CPT codes were surveyed at the January 2025 AMA RUC meeting. For CY 2026, we are proposing the RUC-recommended work RVUs of 9.41 for CPT code 4001X and 13.50 for CPT code 5XX11. We are proposing the following refinements to the direct PE inputs for CPT code 4001X. We disagree with the RUC recommendation to use the standard 90-day global pre-service clinical labor times in the Facility setting for CPT code 4001X since this is a 0-day global procedure. We do not agree that it would serve the interests of relativity to use the 90-day global clinical labor standard times for a 0-day global service. Therefore, we are proposing the standard 000/010 global day extensive pre-service clinical labor times in the Facility setting, resulting in [[Page 32417]] the following changes: the minutes associated with CA002 (Coordinate pre-surgery services (including test results)) are reduced from 20 minutes to 10 minutes; the minutes associated with CA003 (Schedule space and equipment in facility) are reduced from 8 minutes to 5 minutes; the minutes associated with CA004 (Provide pre-service education/obtain consent) are reduced from 20 minutes to 7 minutes; and the minutes associated with CA005 (Complete pre-procedure phone calls and prescription) are reduced from 7 minutes to 3 minutes. We are proposing the RUC-recommended direct PE inputs for CPT code 5XX11 without refinement. (10) Endoscopic Sleeve Gastroplasty (CPT Code 4XX04) In September 2024, CPT approved the addition of a new code to report transoral gastric restrictive procedures using an endosurgical approach. CPT code 4XX04 (Gastric restrictive procedure, transoral, endoscopic sleeve gastroplasty (ESG), including argon plasma coagulation, when performed) was surveyed for the January 2025 RUC meeting. The RUC-recommended a direct crosswalk to CPT 36832 (Revision, open, arteriovenous fistula; without thrombectomy, autogenous or nonautogenous dialysis graft (separate procedure)) with a work RVU of 13.50. During the RUC prefacilitation meeting, 1 unit of CPT code 99232 (Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and a moderate level of medical decision making) was removed from the postoperative period, and 20 minutes of work time was added into the immediate post-service time. The RUC also revised the global period of CPT code 4XX04 to reduce the work and time value of CPT code 99238 (Hospital inpatient or observation discharge day management; 30 minutes or less on the date of the encounter) to half of the original value. We believe the RUC partially applied the 23-hr policy when it applied the policy to the immediate postservice time but not to the work RVU. The 23-hour policy established in the CY 2011 PFS final rule (75 FR 73226) applies to services that are typically performed in the outpatient setting and require a hospital stay of less than 24 hours. We discussed in the CY 2011 PFS final rule that we believe the value of these codes should not reflect work that is typically associated with an inpatient service. We believe the 23-hour policy in its entirety should be applied to CPT code 4XX04, which includes the work RVUs along with the immediate post service time. Following the valuation methodology we established for the 23 hour policy in the CY 2011 PFS final rule (75 FR 73226), we are proposing a work RVU of 12.56 for CPT code 4XX04. The steps are as follows: Step (1): The RUC appropriately reduced the hospital discharge day management service included in the global period from 1 to 0.5; therefore, we will skip this step. Step (2): 13.50-1.39 ** = 12.11 Step (3): 12.11 + (20 minutes x 0.0224) *** = 12.56 RVUs * Value associated with \1/2\ hospital day discharge management service. ** Value associated with an inpatient hospital visit, CPT Code 99232. *** Value associated with the reallocated intraservice time multiplied by the postservice intensity of the 23-hour stay code. We are proposing the RUC-recommended direct PE inputs for CPT code 4XX04 without refinement. (11) Transurethral Robotic-Assisted Resection of Prostate (CPT Codes 52500, 52601, 52630, 52648, 52649, and 52XX1) In May 2024, the CPT Editorial Panel created a new CPT code to report transurethral robotic-assisted waterjet resection of the prostate, including ultrasound guidance: CPT code 52XX1 (Transurethral robotic-assisted waterjet resection of prostate, including intraoperative planning, ultrasound guidance, control of postoperative bleeding, complete, including vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy, when performed). CPT code 52XX1 was surveyed for the September 2024 RUC meeting along with the existing codes in this code family: CPT code 52500 (Transurethral resection of bladder neck (separate procedure)), CPT code 52601 (Transurethral electrosurgical resection of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included)), CPT code 52630 (Transurethral resection; residual or regrowth of obstructive prostate tissue including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included)), CPT code 52648 (Laser vaporization of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, internal urethrotomy and transurethral resection of prostate are included if performed)), and CPT code 52649 (Laser enucleation of the prostate with morcellation, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, internal urethrotomy and transurethral resection of prostate are included if performed)). For CY 2026, the RUC-recommended a work RVU of 6.00 for CPT code 52500, a work RVU of 10.25 for CPT code 52XX1, a work RVU of 10.00 for CPT code 52601, a work RVU of 6.55 for CPT code 52630, a work RVU of 10.05 for CPT code 52648, and a work RVU of 14.56 for CPT code 52649. We are proposing the RUC-recommended work RVU of 6.00 for CPT code 52500, the work RVU of 10.25 for CPT code 52XX1, the work RVU of 10.00 for CPT code 52601, the work RVU of 6.55 for CPT code 52630, and the work RVU of 10.05 for CPT code 52648. We note that the RUC will be placing CPT code 52XX1 on the New Technology/New Services list and CPT code 52XX1 will be re-reviewed by the RUC in 3 years to ensure correct valuation, patient population, and utilization assumptions. Also, we received external input suggesting the RVU for CPT code 52XX1 should be higher than the RUC recommendation of 10.25 and that an RVU of 14.56 (same as the RUC recommendation for CPT code 52649) would be more appropriate. However, given the survey times and comparisons to similarly timed codes with similar intensity, an RVU of 14.56 for CPT code 52XX1 would not be accurate. The RUC's valuation for CPT code 52XX1 is typical for a procedure code with the same work time values (that is, 60 minutes intra-service time and 234 minutes of total time). With all of these considerations, we believe that proposing a work RVU of 10.25 for CPT code 52XX1 maintains relativity with the other CPT codes in this family. For CPT code 52649, we disagree with the RUC-recommended work RVU of 14.56 and we are proposing an RVU of 13.00 instead, based on a crosswalk to CPT code 53500 (Urethrolysis, transvaginal, secondary, open, including cystourethroscopy (for example, postsurgical obstruction, scarring)). We believe the RUC-recommended work RVU of 14.56 is too high and should be lowered due to the decrease in intraservice time of 30 minutes (from 120 minutes to 90 minutes), and the decrease in total time by 16 minutes (from 279 minutes to 263 [[Page 32418]] minutes). An RVU of 13.00 for CPT code 52649 is supported by the range of CPT code 64912 (Nerve repair; with nerve allograft, each nerve, first strand (cable)) with an RVU of 12.00, the same intraservice time and 272 minutes of total time, and by CPT code 15730 (Midface flap (that is, zygomaticofacial flap) with preservation of vascular pedicle(s)) with an RVU of 13.50, the same intraservice time and 255.5 minutes of total time. We are proposing the RUC-recommended direct PE inputs for CPT codes 52500, 52XX1, 52601, 52630, and 52649 without refinement. For CPT code 52648, we are proposing to remove the 6 minutes of clinical labor time for CA021 (Perform procedures/services--NOT directly related to physician work time). Therefore, the equipment time reported under EF031 (table, power) has also been reduced by 6 minutes (from 95 minutes to 89 minutes) to reflect the removal of clinical labor activity CA021 from CPT code 52648. We note that CPT code 52648 is performed in the facility setting only and the standard is 0 minutes for CA021 in the facility. Also, supply item SL036 (cup, biopsy- specimen sterile 4oz) was reported as a non-facility PE input for CPT code 52648. Since CPT code 52648 is only performed in the facility setting, we believe inclusion of supply item SD036 as a non-facility PE input was unintentional and therefore proposing to remove. (12) Cystourethroscopy (CPT Code 52XX2) At the September 2024 CPT Editorial Panel Meeting, CPT code 0619T (Cystourethroscopy with transurethral anterior prostate commissurotomy and drug delivery, including transrectal ultrasound and fluoroscopy, when performed) was deleted and replaced with CPT code 52XX2, which describes an endoscopic procedure for the management of benign prostatic enlargement that entails using both a non-medication-coated and a medication-coated balloon to open the prostatic urethra. CPT code 52XX2 (Cystourethroscopy with initial transurethral anterior prostate commissurotomy with a non-drug-coated balloon catheter followed by therapeutic drug delivery into the prostate by a drug-coated balloon catheter, including transrectal ultrasound and fluoroscopy, when performed) was surveyed at the January 2025 AMA RUC meeting. We are proposing the RUC-recommended work RVU of 3.62 for CPT code 52XX2. For direct PE, we are proposing to refine the clinical labor associated with clinical activity CA023 (Monitor patient following procedure/service, no multitasking) to 0 minutes for CPT code 52XX2. We note that the RUC-recommended a direct crosswalk of most clinical labor times for CPT code 52XX2 based on reference CPT code 52441 (Cystourethroscopy, with insertion of permanent adjustable transprostatic implant; single implant), however, the PE Summary of Recommendations for CPT code 52XX2 only describes patient monitoring activities done while multi-tasking and does not describe any no- multitasking (1:1) patient monitoring time (clinical activity code CA023) like it was described in the PE SOR for CPT code 52441, reviewed for CY 2020 PFS rulemaking. We are therefore proposing to remove this clinical labor time. We also disagree with the RUC-recommended 40 minutes for the clinical labor associated with clinical activity CA025 (Clean scope) and are proposing to refine CA025 to the standard 30 minutes for a flexible scope. We would like to note that, while the PE SOR for CPT code 52XX2 did not justify non-standard times for clinical activities CA016 (Prepare, set-up and start IV, initial positioning and monitoring of patient) and CA017 (Sedate/apply anesthesia) of 2 minutes, we are not proposing to refine these clinical activity times because there was a robust explanation of these non-standard times in the PE SOR for CPT code 52441, which is a clinically similar endoscopy code requiring positioning and anesthetic activities that warrant the non-standard times for CPT codes 52441 and 52XX2. For medical supplies, we are proposing to remove the SM022 (sanitizing cloth-wipe (patient)) supply because there are five of these cloth wipes included in the SA058 supply (pack, urology cystoscopy visit). For equipment times, we are proposing to refine the time for the ES031 (scope video system (monitor, processor, digital capture, cart, printer, LED light)) and ES018 (fiberscope, flexible, cystoscopy) equipment items to account for the clinical labor times that should be included in the standard scope systems and scope equipment formulas. We disagree with the RUC-recommended 64 minutes for ES031 and ES018, and we are proposing to refine ES031 to 52 minutes and ES018 to 79 minutes in accordance with our standard equipment time formulas for scopes and scope video systems. We are proposing all other direct PE inputs for CPT code 52XX2. (13) Prostate Biopsy Services (CPT Codes 55705, 55706, 5XX00, 5XX01, 5XX02, 5XX03, 5XX04, 5XX07, 5XX08, 5XX09, 5XX10, and 76872) At the April 2022 Relativity Assessment Workgroup (RAW), prostate biopsy services were reviewed and identified as services performed by the same physician on the same date of service 75 percent of the time or more. As a result of that review, the RAW requested action plans for September 2022 to determine if specific code bundling solutions should occur for CPT codes 55700 (Biopsy, prostate; needle or punch, single or multiple, any approach) and CPT code 76872 (Ultrasound, transrectal;). The RAW referred that issue to the CPT Editorial Panel for revision of descriptors and for clarity in reporting CPT code 55700 with CPT code 76872. At the May 2024 CPT Editorial Panel meeting, CPT deleted existing CPT code 55700, revised CPT codes 55705 (Biopsy, prostate; any approach, non-imaging-guided) and 76872 and added 9 new codes that clarify reporting for prostate biopsies and the imaging procedures that accompany them. CPT codes 55705, 55706 (Biopsies, prostate, needle, transperineal, stereotactic template guided saturation sampling, including imaging guidance), 5XX00 (Biopsy, prostate, transrectal, ultrasound-guided (i.e., sextant), ultrasound-localized), 5XX01 (Biopsy, prostate, transrectal, ultrasound-guided (i.e., sextant) with MRI-fusion guidance), 5XX02 (Biopsy, prostate, transperineal, ultrasound-guided (i.e., sextant), ultrasound-localized), 5XX03 (Biopsy, prostate, transperineal, ultrasound-guided (i.e., sextant) with MRI-fusion guidance), 5XX04 (Biopsy, prostate, transrectal, MRI-ultrasound-fusion guided, targeted lesion(s) only), 5XX07 (Biopsy, prostate, transperineal, MRI-ultrasound-fusion guided, targeted lesion(s) only, first targeted lesion), 5XX08 (Biopsy, prostate, in-bore CT- or MRI- guided (i.e., sextant), with biopsy of additional targeted lesion(s), first targeted lesion), 5XX09 (Biopsy, prostate, in-bore CT- or MRI- guided targeted lesion(s) only, first targeted lesion), and 5XX10 (Biopsy, prostate, each additional, MRI-ultrasound fusion or in-bore CT- or MRI-guided targeted lesion (List separately in addition to code for primary procedure)), and 76872 were surveyed at the September 2024 RUC meeting. We are proposing the RUC-recommended work RVUs for all twelve CPT codes in this family. We are proposing a work RVU of 1.93 for CPT code 55705, a work RVU of 4.27 for CPT [[Page 32419]] code 55706, a work RVU of 2.63 for CPT code 5XX00, a work RVU of 3.39 for CPT code 5XX01, a work RVU of 3.23 for CPT code 5XX02, a work RVU of 3.81 for CPT code 5XX03, a work RVU of 2.61 for CPT code 5XX04, a work RVU of 3.10 for CPT code 5XX07, a work RVU of 4.00 for CPT code 5XX08, a work RVU of 3.62 for CPT code 5XX09, a work RVU of 1.05 for CPT code 5XX10, and a work RVU of 0.67 for CPT code 76872. We are proposing the RUC-recommended direct PE inputs for all of the codes in this family. (14) Laparoscopic Prostatectomy (CPT Codes 55840, 55842, 55845, 55866, 55867, 558X1, and 558X2) In April 2023, the RUC's Relativity Assessment Workgroup identified CPT codes 38571 (Laparoscopy, surgical; with bilateral total pelvic lymphadenectomy) and 55866 (Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed) as typically reported together 75 percent or more based on 2021 Medicare claims data and referred them to the CPT Editorial Panel to possibly develop a code bundling solution. In May 2024, the CPT Editorial Panel created two new codes to report laparoscopic prostatectomy with lymph node biopsy(ies) (limited pelvic lymphadenectomy) and with bilateral pelvic lymphadenectomy, including external iliac, hypogastric, and obturator nodes, respectively: CPT code 558X1 (Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed; with lymph node biopsy(ies) (limited pelvic lymphadenectomy) and 558X2 ((Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed; with bilateral pelvic lymphadenectomy, including external iliac, hypogastric, and obturator nodes). These new codes were surveyed along with the rest of the family, CPT code 55840 (Prostatectomy, retropubic radical, with or without nerve sparing), 55842 (Prostatectomy, retropubic radical, with or without nerve sparing; with lymph :node biopsy(s) (limited pelvic lymphadenectomy)), 55845 (Prostatectomy, retropubic radical, with or without nerve sparing; with bilateral pelvic lymphadenectomy, including external iliac, hypogastric, and obturator nodes), 55866 (Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed), and 55867 (Laparoscopy, surgical prostatectomy, simple subtotal (including control of postoperative bleeding, vasectomy, meatotomy, urethral calibration and/or dilation, and internal urethrotomy), includes robotic assistance, when performed) at the September 2024 RUC meeting. We are proposing the RUC's recommended work RVU for five of the six codes in the Laparoscopic Prostatectomy family. We are proposing a work RVU of 21.36 for CPT code 55840, a work RVU of 21.36 for CPT code 55842, a work RVU of 25.18 for CPT code 55845, a work RVU of 22.46 for CPT code 55866, a work RVU of 22.46 for CPT code 558X1, and a work RVU of 19.53 for CPT code 55867. We disagree with the RUC's recommended work RVU of 29.35 for CPT code 558X2 and we are instead proposing a work RVU of 27.41 based on a crosswalk to CPT code 50543 (Laparoscopy, surgical; partial nephrectomy). The RUC's recommended work RVU of 29.35 is based on a crosswalk to CPT code 27059 (Radical resection of tumor (for example, sarcoma), soft tissue of pelvis and hip area; 5 cm or greater). However, CPT code 27059 is a procedure typically performed on an inpatient basis, with nearly 200 minutes of additional total time higher than the surveyed work time for CPT code 558X2 (608 minutes as compared with 434 minutes), due to the inclusion of five inpatient office visits in its global period. CPT code 558X2 will typically be performed on an outpatient basis and does not contain any inpatient office visits in its global period, which leads us to believe that CPT code 27059 is not the most accurate choice of CPT code for a valuation crosswalk. Instead, we believe that it is more accurate to propose a work RVU of 27.41 for CPT code 558X2 based on the crosswalk to CPT code 50543. This crosswalk code is another type of surgical laparoscopy which more closely matches the intraservice work time (240 minutes against 230 minutes) and total work time (557 minutes against 434 minutes) of CPT code 558X2. We also note that the intensity of CPT code 558X2 is anomalously high in relation to the rest of this code family at the RUC's recommended work RVU of 29.35, roughly 30-40 percent higher than any of its peer codes. While we agree that CPT code 558X2 should have the highest intensity amongst this group of codes, we believe that our proposed work RVU of 27.41 reflects a more accurate intensity relative to the rest of the family. For the direct PE inputs, we are proposing to correct what appears to be an error in the recommendations for CPT code 55867. The RUC- recommended 106 minutes of clinical labor time for the CA039 (Post- operative visits (total time)) activity based on two Level 4 office visits included in the global period for CPT code 55867. However, this CPT code instead contains one Level 3 and one Level 4 office visit which sum to 89 minutes of clinical labor time, not 106 minutes. We are proposing to make this correction to the CA039 clinical labor time for CPT code 55867, which also carries over to the equipment time for the power table (EF031) and the surgical light (EF014). We are proposing the direct PE inputs as recommended by the RUC in all other cases for this code family. (15) Endovascular Therapy With Imaging (CPT Codes 61624, 61626, 75894, and 75898) In April 2022, the Relativity Assessment Workgroup (RAW) requested action plans to evaluate potential code bundling solutions for the following code pairs: CPT code 61624 (Transcatheter permanent occlusion or embolization [for example, for tumor destruction, to achieve hemostasis, to occlude a vascular malformation], percutaneous, any method; central nervous system [intracranial, spinal cord]) and CPT code 75894 (Transcatheter therapy, embolization, any method, radiological supervision and interpretation), CPT code 61624 and CPT code 75898 (Angiography through existing catheter for follow-up study for transcatheter therapy, embolization or infusion, other than for thrombolysis), CPT code 61626 (Transcatheter permanent occlusion or embolization [e.g., for tumor destruction, to achieve hemostasis, to occlude a vascular malformation], percutaneous, any method; non-central nervous system, head or neck [extracranial, brachiocephalic branch]) and CPT code 75894, and CPT code 61626 and CPT code 75898. The RUC reviewed these codes during the April 2024 RUC meeting. For CY 2026, the RUC-recommended a work RVU of 20.00 for CPT code 61624, an RVU of 15.31 for CPT code 61626, an RVU of 2.25 for CPT code 75894, and an RVU of 1.85 for CPT code 75898. We are proposing the RUC-recommended work RVU of 2.25 for CPT code 75894 and work RVU of 1.85 for CPT code 75898. However, we have concerns about the survey data due to the significant variations in both work values and intraservice times reported by respondents. These variations can suggest that the proposed RVU values at the 25th percentile may not accurately [[Page 32420]] reflect the actual work involved in performing these services. As a result, we are seeking public comments regarding the proposed work RVUs for CPT codes 75894 and 75898. We disagree with the RUC-recommended work RVUs for CPT codes 61624 and 61626. For CPT code 61624, we are proposing a work RVU of 17.06 instead of the RUC-recommended 20.00. This proposal is based on a crosswalk to CPT code 49622 (Repair of parastomal hernia, any approach (that is, open, laparoscopic, robotic), initial or recurrent, including implantation of mesh or other prosthesis, when performed; incarcerated or strangulated). This crosswalk is supported by a range of CPT code 33224 (Insertion of pacing electrode, cardiac venous system, for left ventricular pacing, with attachment to previously placed pacemaker or implantable defibrillator pulse generator (including revision of pocket, removal, insertion, and/or replacement of existing generator)) with a work RVU of 9.04, 135 minutes intra-service time and 204 minutes total time, and CPT code 93590 (Percutaneous transcatheter closure of paravalvular leak; initial occlusion device, mitral valve.) with a work RVU of 21.70, 135 minutes intraservice time and 223 minutes total time. The intraservice time for CPT code 61624 decreased from 232 to 150 minutes, reducing by 82 minutes, and the total time decreased from 362 to 246 minutes, reducing by 116 minutes, which supports a lower RVU. The lower work RVU proposal of 17.06 reflects the significant decreases in both intraservice time and total time for CPT code 61624. For CPT code 61626, we are proposing a work RVU of 13.46 instead of the RUC-recommended work RVU of 15.31. This proposal is based on a crosswalk to CPT code 49594 (Repair of anterior abdominal hernia[s] [that is, epigastric, incisional, ventral, umbilical, spigelian], any approach [that is, open, laparoscopic, robotic], initial, including implantation of mesh or other prosthesis when performed, total length of defect[s]; 3 cm to 10 cm, incarcerated or strangulated). This crosswalk is supported by a range of CPT code 55881 (Ablation of prostate tissue, transurethral, using thermal ultrasound, including magnetic resonance imaging guidance for, and monitoring of, tissue ablation) with a work RVU of 9.80, 120 minutes intra-service time and 202 minutes total time, and CPT code 93580 (Percutaneous transcatheter closure of congenital interatrial communication (that is, Fontan fenestration, atrial septal defect) with implant) with a work RVU of 17.97, 120 minutes intraservice time and 210 minutes total time. The intraservice time for CPT code 61626 decreased by 53 minutes, and the total time decreased by 90 minutes, which supports a lower RVU. The lower work RVU proposal of 13.46 reflects the significant decreases in both intraservice time and total time for CPT code 61626. We are also proposing the RUC-recommended direct PE inputs for CPT codes 61624, 75894, and 75898 without refinement. However, we disagree with a few RUC-recommended direct PE inputs for CPT code 61626. We are proposing to refine the clinical staff time for the CA011 activity 'Provide education/obtain consent' to the standard of 2 minutes for CPT code 61626. Since no rationale was provided in the PE Summary of Recommendations for extending clinical staff time beyond the standard 2 minutes for the CA011 activity, we believe 2 minutes is more appropriate than the RUC-recommended 5 minutes. We are also proposing to change the medical supply quantity of the SD172 (guidewire, cerebral (Bentson)) supply from 1 to 0 because CPT code 61626 describes non- central nervous system procedures, while SD172 is a cerebral guidewire; thus, we believe this supply is not typically used in this service. Additionally, regarding the clinical labor associated with CA024 (Clean room/equipment by clinical staff), we believe that the RUC's recommendation of 3 minutes for CA024 was not properly accounted for in one of the equipment time formula inputs. Therefore, we are proposing an increase of 3 minutes to the equipment time for the angiography room (EL011), which increases from 124 to 127 minutes for this code to incorporate this missing time associated with the CA024 activity. Lastly, for CPT code 61626, the equipment time for the professional PACS workstation (ED053) should be half of the physician preservice time plus the full physician intraservice time. We believe this was an unintended error, and we are proposing 152 minutes after rounding up from 151.5 minutes. Although we are proposing the direct PE inputs for CPT codes 75894 and 75898 without refinement, we have concerns over one of the RUC- recommended direct PE inputs, CA021 (Perform procedure/service--NOT directly related to physician work time) as the involvement of additional vascular interventional technologists remains unclear. According to the RUC recommendation, CPT codes 61624 and 61626 should not be reported in conjunction with CPT codes 75894 and 75898. And the RUC's recommendation of 60 minutes of clinical labor time for CPT code 75894 and 45 minutes for CPT code 75898 associated with the CA021 activity did not include an adequate explanation for these activities when CPT codes 75894 and 75898 are performed in the absence of CPT codes 61624 and 61626. Thus, we are proposing the direct PE inputs as recommended by the RUC; however, due to the concerns mentioned above, we are seeking public comments regarding the recommended CA021 clinical labor time of 60 minutes for CPT code 75894 and 45 minutes for CPT code 75898, specifically what intraservice clinical labor time would be typical for these procedures. (16) Guided High Intensity Focused Ultrasound (CPT Code 61715) In September 2023, the CPT Editorial Panel created a new Category I code to describe magnetic resonance image guided high intensity focused ultrasound (MRgFUS) intracranial ablation for treatment of a severe central tremor that is recalcitrant to other medical treatments for CY 2025 to replace the existing Category III code. For CY 2025, we finalized the implementation of CPT code 61715 (Magnetic resonance image guided high intensity focused ultrasound (MRgFUS), stereotactic ablation of target, intracranial, including stereotactic navigation and frame placement, when performed) as a global-only code with direct PE inputs in the facility setting only, as recommended by the RUC. After implementation, an interested party raised concerns about the lack of non-facility pricing for the new CPT code 61715, which would result in an untenable non-facility payment equal to the established facility payment. The interested party expressed concerns about access to the service in the non-facility setting given the facility payment rate and provided information about the appropriateness of the service in the non-facility setting and the payments set by the MACs for the predecessor code. The interested party stated that the predecessor code, CPT code 0398T, was paid $9,750 in the non-facility setting by one MAC, and for CY 2025, CPT code 61715 is paid at $1,180 in the non-facility setting due to being set equal to the facility payment, absent established non-facility PE RVUs. In an effort to temporarily resolve this issue for CY 2025, we implemented PC/TC splits for CPT code 61715, with contractor-pricing for the global and technical components, which would restore MAC discretion in pricing this [[Page 32421]] service, including in the non-facility setting. For CY 2026, we are seeking comments on non-facility pricing of this service to address the issue permanently. When considering potential crosswalk or reference codes for proposed direct PE inputs in the non-facility setting, we found all codes in the CPT code 615XX, 616XX, 617XX, and 618XX series are only valued in the facility setting and therefore were not tenable crosswalk codes for the non-facility direct PE. Additionally, there are MRI-guidance ultrasound ablation Category III codes that could be commensurate for non-facility direct PE, such as CPT code 0071T (Focused ultrasound ablation of uterine leiomyomata, including MR guidance; total leiomyomata volume less than 200 cc of tissue), and the previous predecessor code of CPT code 61715, CPT code 0398T, but they are/were contractor-priced under the PFS and do not have direct PE inputs for consideration. We considered the prostate tissue MRI-guided ultrasound ablation codes, CPT codes 55881 (Ablation of prostate tissue, transurethral, using thermal ultrasound, including magnetic resonance imaging guidance for, and monitoring of, tissue ablation) and 55882 (Ablation of prostate tissue, transurethral, using thermal ultrasound, including magnetic resonance imaging guidance for, and monitoring of, tissue ablation; with insertion of transurethral ultrasound transducer for delivery of thermal ultrasound, including suprapubic tube placement and placement of an endorectal cooling device, when performed) as possible references because they are valued in the non-facility setting, but they include very high-cost disposable supplies and equipment that are specific to the CPT codes including SA136 (TULSA-PRO Disposable Kit) and EQ410 (TULSA-PRO TDC Cart), as well as some other direct PE inputs that may not be typical for CPT code 61715. We also considered partial crosswalks of CPT codes for portions of CPT code 61715, such as CPT codes 77372 (Radiation treatment delivery, stereotactic radiosurgery (SRS), complete course of treatment of cranial lesion(s) consisting of 1 session; linear accelerator based), 61800 (Application of stereotactic headframe for stereotactic radiosurgery (List separately in addition to code for primary procedure)), 61736 (Laser interstitial thermal therapy (LITT) of lesion, intracranial, including burr hole(s), with magnetic resonance imaging guidance, when performed; single trajectory for 1 simple lesion), and 61796 (Stereotactic radiosurgery (particle beam, gamma ray, or linear accelerator); 1 simple cranial lesion), but these codes have similar challenges related to the facility-only pricing and/or direct PE inputs that would not be applicable to or typical for CPT code 61715. Given these challenges, we are seeking comments on appropriate non- facility direct PE inputs (clinical labor, disposable supplies, and medical equipment), and/or appropriate crosswalk codes for non-facility direct PE inputs for CPT code 61715. We would also consider a non- facility direct PE RVU crosswalk (in lieu of establishing specific non- facility direct PE inputs) for CPT code 61715 if that PE RVU could be substantiated by commenters. We note that we would not consider the MACs' established payment for the predecessor CPT code 0398T, particularly outlier payment rates, as substantiation for a PE RVU crosswalk for CPT code 61715 because there was significant variation among the MACs' payment for CPT code 0398T, some of which did not establish payment in the non-facility. Additionally, the established MAC payments do not differentiate between work, PE, and malpractice, making it difficult to establish a reasonable PE RVU for CPT code 61715 based on MAC payment alone. We received a second letter from an interested party stating that the previous non-facility payment rate for CPT code 0398T was $9,750, but we note that this payment rate is a significant outlier payment based on the reported range of payments from the MACs in April 2022. The range of reported payments in the facility setting reported by the MACs in April 2022 for CPT code 0398T was $440.50 to $20,842.19, and $1,554.58 to $2,036.75 when the highest and lowest outliers were removed. Of note, when the outliers were removed from the range, the established payment by the MACs for CPT code 0398T are commensurate with the established national facility pricing of $1,180 for CPT code 61715. In April 2022, only one MAC reported an established non-facility payment of $2,036.75, therefore, we are unable to substantiate the interested parties' statement about a non-facility payment of $9,750 and are seeking comments on any additional information about the established MAC payments for CPT code 0398T that we could use to consider non-facility pricing for CPT code 61715.The second interested party requested contractor-pricing for CPT code 61715 for CY 2026. We note that, in an effort to temporarily resolve this issue for CY 2025, we implemented the PC/TC splits for CPT code 61715, with contractor-pricing for the global and technical components, to restore MAC discretion when it came to pricing this service. Therefore, for CY 2026, we are seeking comments on national pricing options in the non-facility setting to address it permanently. We are also seeking comments in the form of clinical evidence to support the appropriateness of this service in the non-facility setting and the appropriateness of the established PC/TC split for CPT code 61715. (17) Percutaneous Interlaminar Lumbar Decompression (CPT Codes 62XX0 and 62XX1) In September 2024, CPT created two new Category I codes to replace existing Category III code 0275T. CPT codes 62XX0 (Decompression, percutaneous, with partial removal of the ligamentum flavum, including laminotomy for access, epidurography, and imaging guidance (ie, CT or fluoroscopy), bilateral; one insterspace, lumbar) and 61XX1 (Decompression, percutaneous, with partial removal of the ligamentum flavum, including laminotomy for access, epidurography, and imaging guidance (that is, CT or fluoroscopy), bilateral; additional interspace(s), lumbar (List separately in addition to code for primary procedure) were surveyed for the January 2025 RUC meeting. CPT code 62287 (Decompression percutaneous, of nucleus pulposus of intervertebral disc, any method utilizing needle-based technique to remove disc material under fluoroscopic imaging or other form of indirect visualization, with discography and/or epidural injection(s) at the treated level(s), when performed, single or multiple levels, lumbar) was not surveyed as part of the code family due to low utilization (approximately 100 claims in 2023 per the RUC). Specialty societies stated that a code change application requesting the deletion of CPT code 62287 will take place for the 2026 CPT cycle. We are proposing the RUC-recommended work RVUs for both CPT code 62XX0 (8.00) and CPT code 62XX1 (4.25) without refinement. We are also proposing the RUC-recommended direct PE inputs without refinement for both CPT code 62XX0 and 62XX1. (18) Percutaneous Decompression of Median Nerve (CPT Code 647XX) In September 2024, the CPT Editorial Panel created a new CPT code to report percutaneous decompression of the median nerve at the carpal tunnel using ultrasound guidance and a balloon [[Page 32422]] dilation device while transecting the transcarpal ligament: CPT code 647XX (Decompression; median nerve at the carpal tunnel, percutaneous, with intracarpal tunnel balloon dilation, including ultrasound guidance). For CY 2026, the RUC-recommended a work RVU of 2.70 for CPT code 647XX. We are proposing the RUC-recommended work RVU of 2.70 for CPT code 647XX. We would like to note that CPT code 647XX is a new technology procedure, previously reported with an unlisted code, and we received external input suggesting the RVU should be 6.00, which is much higher than the RUC recommendation. However, a review of similarly timed procedures does not support an RVU greater than the RUC recommendation of 2.70. The RUC's valuation for CPT code 647XX is very typical for a procedure code with the same work time values (that is, 20 minutes intra-service time and 57 minutes of total time) and has a typical intensity for this kind of procedure. We are proposing the RUC-recommended direct PE inputs for CPT code 647XX without refinement. (19) Baroreflex Activation Therapy (CPT Codes 64XX5, 64XX6, 64XX7, 64XX8, 64XX9, 64X10, 93XX4, and 93XX5) Baroreflex activation therapy (BAT) treats heart failure symptoms and resistant hypertension by electrically stimulating carotid baroreceptors within the carotid artery. The BAT modulation system received FDA approval in August 2019, and the CPT Editorial Panel approved conversion from a Category III code set to a Category I code set at the September 2024 CPT Panel meeting through the creation of the following CPT codes: 64XX5 (Initial open implantation of baroreflex activation therapy (BAT) modulation system, including lead placement onto the carotid sinus, lead tunnelling, connection to a pulse generator placed in a distant subcutaneous pocket (that is, total system), and intraoperative interrogation and programming), 64XX6 (Revision or replacement of baroreflex activation therapy (BAT) modulation system, with intraoperative interrogation and programming; lead only), 64XX7 (Revision or replacement of baroreflex activation therapy (BAT) modulation system, with intraoperative interrogation and programming; pulse generator only), 64XX8 (Removal of baroreflex activation therapy (BAT) modulation system; total system, including lead and pulse generator), 64XX9 (Removal of baroreflex activation therapy (BAT) modulation system; total system, including lead and pulse generator; lead only), 64X10 (Removal of baroreflex activation therapy (BAT) modulation system; total system, including lead and pulse generator; pulse generator only), 93XX5 (Interrogation device evaluation (in person), carotid sinus baroreflex activation therapy (BAT) modulation system including telemetric iterative communication with the implantable device to monitor device diagnostics and programmed therapy values, with interpretation and report (for example, battery status, lead impedance, pulse amplitude, pulse width, therapy frequency, pathway mode, burst mode, therapy start/stop times each day); with programming, including optimization of tolerated therapeutic level setting), and 93XX4 (Interrogation device evaluation (in person), carotid sinus baroreflex activation therapy (BAT) modulation system including telemetric iterative communication with the implantable device to monitor device diagnostics and programmed therapy values, with interpretation and report (for example, battery status, lead impedance, pulse amplitude, pulse width, therapy frequency, pathway mode, burst mode, therapy start/stop times each day); without programming). This code family describes the implantation, replacement, revision, removal and interrogation/programming of a BAT modulation system and was surveyed for the January 2025 RUC meeting. We are proposing the RUC's recommended work RVU for seven of the eight codes in the Baroreflex Activation Therapy family. We are proposing a work RVU of 11.00 for CPT code 64XX5, a work RVU of 11.30 for CPT code 64XX6, a work RVU of 8.01 for CPT code 64XX7, a work RVU of 12.13 for CPT code 64XX8, a work RVU of 8.95 for CPT code 64XX9, a work RVU of 8.23 for CPT code 64X10, and a work RVU of 0.90 for CPT code 93XX5. We disagree with the RUC's recommended work RVU of 0.79 for CPT code 93XX4 and we are instead proposing a work RVU of 0.65 based on a crosswalk to CPT code 93279 (Programming device evaluation (in person) with iterative adjustment of the implantable device to test the function of the device and select optimal permanent programmed values with analysis, review and report by a physician or other qualified health care professional; single lead pacemaker system or leadless pacemaker system in one cardiac chamber), which was the top reference code from the survey. We believe that it is more accurate to base the work valuation for CPT code 93XX4 on this crosswalk to CPT code 93279 due to the close clinical similarity between the two procedures (both of them cardiac device evaluations) which share the same intraservice work time of 10 minutes and the same total work time of 22 minutes. The RUC recommended the survey 25th percentile work RVU of 0.79 for CPT code 93XX4, stating that CPT code 93XX4 has a higher estimated intensity and complexity than the two key reference services (including CPT code 93279). However, we do not agree that CPT code 93XX4 should be valued at a higher work RVU based on the intensity for a clinically similar device evaluation code like CPT code 93279. The RUC's recommended work RVU of 0.79 results in an intensity for CPT code 93XX4 which is close to 40 percent higher than the intensity for peer CPT code 93XX5. We do not believe that this results in an accurate valuation for the two new codes given that CPT code 93XX4 describes cases where the BAT device is working properly and does not require adjustment, whereas CPT code 93XX5 describes cases where the BAT device is working properly but requires additional device programming. We believe that CPT code 93XX5 should have the higher intensity given the additional device programming required in this code to achieve optimal therapeutic levels for the BAT device. Therefore, we are proposing a work RVU of 0.65 for CPT code 93XX4, which we believe reflects more accurate relativity between CPT code 93XX4 and CPT code 93XX5. We are proposing the direct PE inputs as recommended by the RUC for CPT codes 64XX5-64X10. For CPT codes 93XX4 and 93XX5, we disagree with the RUC- recommended use of the RN (L051A) clinical labor type. These kinds of device evaluation procedures typically do not make use of RN clinical labor; for example, reference codes 93279 and 93281, which were used as a model for the direct PE inputs of these two new codes, both use a combination of the RN/LPN/MTA blend (L037D) and Medical/ Technical Assistant (L026A) clinical labor types. Therefore, we are proposing to refine the clinical labor for CPT codes 93XX4 and 93XX5 from RN (L051A) to the RN/LPN/MTA blend (L037D); we are proposing that the numerical values for each clinical labor input will remain the same, with only the staff type changing from L051A to L037D. We are proposing the rest of the RUC-recommended PE inputs without refinement. [[Page 32423]] (20) Percutaneous Electrical Nerve Field Stimulation (CPT Code 64X11) In September 2024, the CPT Editorial Panel created a new CPT code to report percutaneous electrical nerve field stimulation of cranial nerves: CPT code 64X11 (Percutaneous electrical nerve field stimulation, cranial nerves, without implantation). For CY 2026, the RUC-recommended a work RVU of 1.50 for CPT code 64X11. We are proposing the RUC-recommended work RVU of 1.50 for CPT code 64X11, and the RUC-recommended direct PE inputs without refinement. (21) Laminotomy--Repair of Disc Defect (CPT Code 6XX13) In September 2024, the CPT Editorial Panel created a new add-on code to report the repair of an annular defect by implantation of a bone anchored annular closure device after a laminotomy (hemilaminectomy): CPT code 6XX13 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; with repair of annular defect by implantation of bone anchored annular closure device, including all imaging guidance, 1 interspace, lumbar (List separately in addition to code for primary procedure)). CPT codes 63030 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; 1 interspace, lumbar) and 63035 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; each additional interspace, cervical or lumbar (List separately in addition to code for primary procedure)) were identified as codes in the same family as CPT code 6XX13, but were recently surveyed in 2022 and discussed in the CY 2023 PFS final rule (87 FR 69495 through 64999). The specialty societies stated that the work for these procedures is unchanged and distinct from the work of the new code, and therefore only surveyed CPT code 6XX13. For CY 2026, we are proposing the RUC-recommended work RVU of 2.50 for CPT code 6XX13. There are no direct PE inputs for CPT code 6XX13. (22) Cerebral Perfusion & CT Angiography-Head & Neck (CPT Codes 70496, 70498, 70XX1, 70XX2, and 70XX3). In May 2024, the CPT Editorial Panel created three new codes for cerebral perfusion and CT angiography of the head and neck: CPT code 70XX1 (Computed tomographic angiography (CTA), head and neck, with contrast material(s), including noncontrast images, when performed, and image postprocessing), CPT code 70XX2 (Computed tomographic (CT) cerebral perfusion analysis with contrast material(s), including image postprocessing performed with concurrent CT or CT angiography of the same anatomy (List separately in addition to code for primary procedure)), and 70XX3 (Computed tomographic (CT) cerebral perfusion analysis with contrast material(s), including image postprocessing performed without concurrent CT or CT angiography of the same anatomy). Codes 70XX1, 70XX2, and 70XX3 were surveyed for the September 2024 RUC meeting, along with the existing standalone codes for CTA head and CTA neck in this code family: CPT code 70496 (Computed tomographic angiography, head, with contrast material(s), including noncontrast images, if performed, and image postprocessing) and CPT code 70498 (Computed tomographic angiography, neck, with contrast material(s), including noncontrast images, if performed, and image postprocessing). We are proposing the RUC-recommended work RVU of 2.50 for CPT code 70XX1, the work RVU of 0.77 for CPT code 70XX2, the work RVU of 1.00 for CPT code 70XX3, and the work RVU of 1.75 for both CPT codes 70496 and 70498. We are proposing the RUC-recommended direct PE inputs for CPT codes 70XX1, 70XX2, 70XX3, 70496, and 70498 without refinement. (23) Coronary Atherosclerotic Plaque Assessment (CPT Code 75XX6) In September 2024, the CPT Editorial Panel created new Category I CPT code 75XX6 (Quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, derived from augmentative software analysis of the data set from a coronary computed tomographic angiography, with interpretation and report by a physician or other qualified health care professional) and deleted the four existing Category III CPT codes associated with coronary atherosclerotic plaque assessment. We are proposing the RUC-recommended work RVU of 0.85 for CPT code 75XX6. For the direct PE inputs, these recommendations also include a new supply item, Plaque Characterization Analysis Software, that lists a per-patient fee of $1500 for the plaque data analysis summary generated by the vendor. This RUC-recommended supply item accounts for the overwhelming majority of this CPT code's PE valuation. We continue to have concerns that software analysis fees are not well accounted for in our direct PE methodology, as discussed for CPT code 75580 (Noninvasive estimate of coronary fractional flow reserve (FFR) derived from augmentative software analysis of the data set from a coronary computed tomography angiography, with interpretation and report by a physician or other qualified health care professional) in our CY 2024 final rule (88 FR 78901); however, we recognize that the analysis represents a significant part of the resource costs associated with this procedure. Similar to our previously finalized policy for CPT code 75580, we are therefore proposing to identify a crosswalk code for CPT code 75XX6 based on the OPPS assignment for the current coding under which this service is paid, Category III CPT code 0625T (Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; computerized analysis of data from coronary computed tomographic angiography). We are proposing to crosswalk the PE RVU for CPT code 75XX6 to the PE RVU for CPT code 77373 (Stereotactic body radiation therapy, treatment delivery, per fraction to 1 or more lesions, including image guidance, entire course not to exceed 5 fractions), which is a PE-only code with no work RVU and which closely approximates the OPPS assignment previously employed by Category III CPT code 0625T. As we have previously stated in rulemaking, we believe that crosswalking the PE RVU for CPT code 75XX6 to a code with similar resource costs (CPT code 77373) allows CMS to recognize that practitioners are incurring resource costs for the purchase and ongoing use of the software employed in CPT code 75XX6, which would not typically be considered direct PE under our current methodology (86 FR 65038 and 65039). [[Page 32424]] (24) Use of the Relationship Between OPPS APC Relative Weights To Establish PE RVUs for Radiation Oncology Treatment Delivery (CPT Codes 77387, 77402, 77407, 77412, and 77417), Superficial Radiation Treatment (CPT Codes 77X05, 77X07, 77X08, and 77X09), and Proton Beam Treatment Delivery (CPT Codes 77520, 77522, 77523, and 77525)

A. Background

We typically establish two separate PE RVUs for services that can be furnished in either a nonfacility setting, such as a physician's office, or a facility setting, such as a hospital. The nonfacility PE RVUs reflect all the direct and indirect practice expenses involved in furnishing a particular service when the entire service is furnished in a nonfacility setting. The facility PE RVUs reflects the direct and indirect practice expenses associated with furnishing a particular service in a setting such as a hospital, where those facilities incur a portion of the costs and receive a separate Medicare payment for the service. The types of costs covered by the facility fee are comparable to the PE costs incurred by physicians in non-facility settings, namely direct and indirect costs. For certain services, such as radiation treatment delivery services, the coding itself reflects differing types of resources associated with furnishing the service--from coding describing the technical aspects of the treatment delivery only, which do not include any physician work, to codes that describe both the physician work and the technical resources associated with that work. The former services are valued through information on the direct practice expenses, whereas the latter are valued through the resource costs associated with the physician work and any applicable direct practice expenses. When services are furnished in the facility setting, such as a Hospital Outpatient Department (HOPD) or an Ambulatory Surgical Center (ASC), the total combined Medicare payment (made to the facility and the professional) typically exceeds the Medicare payment made for the same service when furnished in the physician office or other nonfacility setting. This payment difference is largely based on differences in statutory provisions that specify how payment amounts are determined under the PFS and under facility payment systems, like the Hospital Outpatient Prospective Payment System (OPPS). CMS has received feedback from interested parties that the difference reflects the greater costs that facilities incur than those incurred by practitioners furnishing services in offices and other nonfacility settings. For example, interested parties have indicated that hospitals incur higher overhead costs because they maintain the capability to furnish services 24 hours a day and 7 days per week, generally furnish services to higher acuity patients than those who receive services in physicians' offices, and have additional legal obligations such as complying with the Emergency Medical Treatment and Labor Act (EMTALA). Additionally, hospitals incur expenses to meet conditions of participation and ASCs incur expenses to meet conditions for coverage in order to participate in Medicare; many of these conditions are not applicable in nonfacility settings. While we receive recommendations from the RUC that include information on resource costs, this information relies heavily on the voluntary submission of information by individuals furnishing the service. Furthermore, in the case of certain direct costs, such as the price of high-cost disposable supplies and expensive capital equipment, even voluntary information has been very difficult to obtain or validate. Such incomplete, small sample, potentially biased or inaccurate resource input costs may distort our valuation of the nonfacility PE RVUs used in calculating PFS payment rates for individual services. As MedPAC noted in their comment to the CY 2011 PFS proposed rule, ``using price information voluntarily submitted by specialty societies, individual practitioners, suppliers, and product developers might not result in objective and accurate prices because each group has a financial stake in the process''. We have repeatedly stated, such as in the CY 2018 final rule, that ``we do not believe that very small numbers of voluntarily submitted invoices are likely to reflect typical resource costs and create the potential for overestimation of supply and equipment costs'' (82 FR 52998).In addition to the difficulty we face in obtaining accurate information about some of the direct PE inputs, the data used in the PFS PE methodology can often be outdated. Although we received updated PPI survey information from the AMA, we are not proposing to utilize this new data in our practice expense methodology due to concerns we identified in section II.B. of this proposed rule. We refer readers there for further discussion. Under the PFS, we strive to maintain relativity in a variety of ways. For example, we typically review the work RVUs, physician time, and direct PE inputs for all codes within families of codes. We also routinely compare work RVUs across services with similar clinical characteristics, global periods, etc. For direct PE inputs, we routinely make standardized assumptions regarding the typical involvement of clinical staff or use of medical equipment based on the kind of service being furnished. However, we also recognize that the utility of using the exact same methodologies to establish and maintain appropriate relativity under the PFS can be especially limited for services that are difficult to compare to other PFS services. Radiation treatment delivery services are a clear example of this dynamic. Generally, the PFS practice expense methodology serves the purpose of using direct cost and professional work data to assign relative value units to services. In establishing nonfacility PE RVUs, these settings include physician offices for a range of kinds of care and specialties as well as independent clinics/suppliers. However, the costs for furnishing radiation treatment delivery services in nonfacility settings (that is, freestanding radiation therapy centers) include capital-intensive and specialized resources that are difficult to compare to the kinds of resources involved in furnishing most other kinds of services in other nonfacility settings. For example, the sum of the current prices for the equipment inputs used in the PE calculations for radiation treatment delivery services (i.e., $3,000,966 for ER089 (IMRT accelerator) and $773,104 for ER056 (radiation treatment vault)) is well over twice the price of the next most expensive piece of equipment ($1,559,013 for EL008 (room, MR) used in furnishing other types of services in other nonfacility settings. Furthermore, other inputs for capital equipment over $1 million are utilized in a wide array of services for multiple specialties, while the equipment inputs for radiation treatment delivery services are more specialized in that they are used in a small number of services and predominantly in radiation oncology. We have long had difficulty understanding how best to characterize the costs associated with architectural infrastructure needs prompted by use of linear accelerators. In the CY 2016 PFS final rule (80 FR 70953), we stated that we believe at least some portions of the costs associated with the radiation treatment vault construction are indirect PE under the established methodology. We most recently noted this difficulty in CY 2021 PFS rulemaking when addressing our inability to use the recommended direct PE inputs for proton beam therapy services (85 FR [[Page 32425]] 84625). We described difficulty using invoices provided, given that they did not separately identify the direct PE inputs (that is, cost of the equipment) from that of the infrastructure needs surrounding the equipment. For the CY 2016 PFS final rule (80 FR 70954), technical PFS rate setting concerns related to how costs were allocated to different codes based on presumptions about costs of image guidance, prompted CMS to maintain the HCPCS G-codes under the PFS in use for reporting radiation treatment delivery services instead of newly introduced CPT codes. (These HCPCS G codes, which mirrored the coding structure prior to the newly introduced CPT codes, were developed for CY 2015 PFS rulemaking in order to allow CMS to include the changes to radiation treatment delivery services in the CY 2016 PFS proposed rule). At that time, CMS adopted the new CPT codes for use under the OPPS, where payment calculations did not suffer from the same problems. Since that time, outpatient radiation therapy services have been reported to Medicare using two different sets of HCPCS codes, depending on whether the services are provided in a HOPD or in a nonfacility setting paid under the PFS. For CY 2026, the CPT Editorial Panel has again revised the codes describing radiation treatment delivery services. This presents an opportunity both to consider adopting CPT codes under the PFS and to re-examine how to best assign relative value units to radiation treatment delivery and superficial radiation treatment delivery services under the PFS. If we were to utilize the RUC-recommended direct PE inputs and new RUC PE survey data to value the new, newly payable, and revised codes in these code families, valuation, and ultimately payment, for these services would be subject to the additional volatility associated with small sample surveys, the unique dynamic of capital-intensive costs, and voluntarily submitted invoice data. We considered the RUC recommended PE inputs for the new, and revised codes listed above in the context of the concerns we outlined above. Specifically, we considered how PE is allocated for under the standard methodologies and noted that radiation treatment delivery and superficial radiation treatment services require long-term capital and infrastructure investments more like facility costs than most other services paid under the PFS. Therefore, we have determined that identifying an alternative data source that is more routinely updated and standardized would improve the accuracy of valuation for these services. One alternative data source that we have examined is the use of OPPS cost data to develop PE RVUs. Under section 1848(c)(2)(N) of the Act, we have authority to establish or adjust PE RVUs using cost, charge, or other data from suppliers or providers of services. Under contract with CMS, RAND Corporation (``RAND'') examined the feasibility of using OPPS cost data in developing PE RVUs.51 52 RAND noted that ``if OPPS-based costs were used to construct total PE RVUs, the valuation process would also be streamlined by using a single data source, thereby eliminating the valuation complexities posed by having separate direct and indirect cost RVU pools.'' RAND identified a number of methodological issues that would need to be resolved to utilize OPPS cost data for all PFS services but found that the potential benefits justified investments to further develop this option. RAND noted that using OPPS data ``might not be appropriate for the entirety of services in the MPFS and the advisability of using OPPS data should be evaluated by categories of costs and/or services.'' Considering that the resources involved in furnishing radiation treatment delivery and superficial radiation treatment delivery services seem to be primarily driven by capital costs that aren't as likely to vary greatly between facilities like hospitals and free standing centers, and because the billing codes for the services (both old and new) are already stratified into professional and technical services, these services have obvious characteristics that make use of OPPS data particularly appropriate. Additionally, use of routinely updated, auditable, and standardized cost data from hospital cost reports that is currently used in setting rates under the OPPS offers the possibility of long- term stable rates that many interested parties have long sought and that may be helpful in maintaining access to care for capital-intensive services. Consequently, we believe that using OPPS data in setting the relative rates for these kinds of services represents the best source for improved valuation of practice expense in free-standing radiation centers. --------------------------------------------------------------------------- \51\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara

O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al.

``Practice Expense Methodology and Data Collection Research and Analysis.'' RAND Corporation, April 11, 2018. https://www.rand.org/pubs/research_reports/RR2166.html. \52\ Burgette, Lane F., Joachim O. Hero, Jodi L. Liu, Catherine

C. Cohen, Barbara O. Wynn, Katie Merrell, et al. Practice Expense

Data Collection and Methodology.'' RAND Corporation, November 1, 2021. https://www.rand.org/pubs/research_reports/RRA1181-1.html. --------------------------------------------------------------------------- We have long noted that data obtained from hospital cost reports is regularly updated, auditable, and required to adhere to national standards for reporting. For example, in the CY 2015 PFS final rule (79 FR 67569), we noted that ``routinely updated, auditable resource cost information submitted contemporaneously by a wide array of providers across the country is a valid reflection of ``relative'' resources and could be useful to supplement the resource cost information developed under our usual methodology based upon a typical case that are developed with information from a small number of representative practitioners for a small percentage of codes in any particular year''. Under OPPS, services are grouped based on clinical characteristics and resource costs into Ambulatory Payment Classifications (APCs). The OPPS methodology utilizes charges from claims data and cost-to-charge ratios developed from cost report data to establish the geometric mean costs for each APC. APC payments are in turn based on the geometric mean costs associated with the services within the APC. While the costs involved in furnishing technical services in the facility setting could generally be expected to be greater than or equal to those of providing the same service in the nonfacility setting, we believe that the relationship of the costs of services within a code family under the PFS would likely mirror the relationship of those costs of services under the OPPS. (The Ambulatory Surgical Center (ASC) fee schedule, which relies on OPPS relative weights multiplied by an ASC conversion factor, is an example of using the same underlying data to establish relative values in two payment systems while continuing to recognize differences in cost structure between settings). For example, if ``service A'' is twice as costly under the OPPS as ``service B'', it is reasonable to assume that the resource costs of ``service A'' are twice as costly as ``service B'' under the PFS. We would expect that the relationship between the resources involved in furnishing services within the same code family under the OPPS would be similar under the PFS. Given that the APC is the payment unit under the OPPS, we believe that applying the relationship of the APC relative weights to the codes within the Radiation Oncology Treatment Delivery and Superficial Radiation Treatment code families is the most accurate and transparent mechanism to translate the [[Page 32426]] relationship of the cost data under the OPPS to the PFS. This approach would help to mitigate volatility in relativity among services that would be attributable to small sample surveys, voluntarily submitted invoice data, or PE allocation methodologies that are not designed primarily for capital-intensive costs in architecture and medical equipment as costly as linear accelerators. Therefore, we are proposing to use this relationship between the relative weights of the OPPS APCs to which the codes in these families are assigned to value the PE portion of the Radiation Oncology Treatment Delivery and Superficial Radiation Treatment code families. We are proposing to use the CY 2026 proposed OPPS APC relative weights and to update these in the final rule based on the updated OPPS APC relative weights. The OPPS APC relative weights can be found in ``Addendum B'' under ``OPPS Addenda'' under the most recent proposed or final rule listed at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. We are also proposing to value the MP RVUs for the Radiation Oncology Treatment Delivery and Superficial Radiation Treatment code families with our usual methodology for PE- only services. While we believe that the relationship between services within the Radiation Oncology Treatment Delivery and Superficial Radiation Treatment code families are well approximated by the relationship between those services under the OPPS, we recognize that the RVUs for these groups of services must reflect the resources involved in furnishing services relative to other services paid under the PFS. As such, the proposed PE RVUs for the Radiation Oncology Treatment Delivery and Superficial Radiation Treatment code families, which are based on the relationship of the relative weights of the OPPS APCs to which these codes are assigned, were calculated using the portion of total PE and MP RVUs accounted for by the volume and PE RVUs of these families as they existed in CY 2025. In other words, we calculated the RVUs for these codes so that the overall PE and MP RVUs for these services represent the same share of total PE and MP RVUs in CY 2025 and CY 2026. Under the PE methodology, the allocation of indirect PE for a given family of services impacts the allocation of indirect PE for other services furnished by the specialties that furnish that family of services (``relevant specialties''). This results from specialty- specific calculations that occur in steps 12 through 15, described in section II.B. of this proposed rule, that are impacted by the size of the pool of indirect allocators (that is, work RVUs and direct costs) for each specialty. Since the codes in these families have historically contained direct PE inputs, and have historically been allocated indirect PE RVUs using the usual methodology, the proposed PE RVUs for CY 2026 have been calculated in a manner that maintains the same effect on the indirect allocation for other services had the PE RVUs been calculated under the usual methodology. In other words, in calculating the proposed PE RVUs for CY 2026, we approximated the direct costs for these services and allocated indirect PE RVUs per the standard methodology in order to both arrive at PE RVUs based on the proposal described above and also maintain relativity with the PE RVUs across the fee schedule. We have included those approximated direct costs in the downloads section of our website to facilitate transparency. We note that the direct PE input public use file does not include these proxy inputs since they only serve the purpose of stabilizing the PE allocated to other services. We seek comments on this aspect of the methodology in particular, especially given our interest in transparency in rate setting. We are seeking comments on our proposal to use the relative relationship between the proposed OPPS APC relative weights to establish the PE RVUs for these code families. We believe that this proposal will improve the accuracy of the relative values established for these services and prevent reliance on irregularly updated information for establishing and maintaining payment for these services under the PFS. Additionally, we believe that the alignment of coding, underlying cost data and billing units between settings paid under the PFS and OPPS will have additional salutary effects, especially in price transparency for patients and payers.

B. Radiation Oncology Treatment Delivery (CPT Codes 77387, 77402,

77407, 77412, and 77417) At the September 2024 CPT Editorial Panel meeting, the Panel approved the revision of CPT codes 77402, 77407 and 77412 to establish a technique-agnostic family of codes and bundle imaging into the three CPT codes, and the deletion of CPT codes 77385, 77386 and 77014. The related guidelines and tables were all updated to reflect the consolidated services for radiation oncology treatment delivery. These services were subsequently reviewed by the RUC and a valuation recommendation was submitted to CMS for inclusion in CY 2026 rulemaking. Please see Table 14 for the current and CY 2026 code descriptors (where applicable) for the CPT codes in this family. [[Page 32427]] [GRAPHIC] [TIFF OMITTED] TP16JY25.025 Although these CPT codes were established for CY 2015, CMS has not used them for payment under the PFS. In October 2013, the CPT Editorial Panel created CPT codes 77402, 77407, 77412, 77385, 77386 and 77387, which were reviewed at the January 2014 RUC meeting for CY 2015. Previously, radiation treatment delivery had been reported with 17 CPT codes. CMS identified concerns with the packaging of Image-guided Radiation Therapy (IGRT) into some of the delivery codes in the family and not others. As a result, CMS created 17 HCPCS G-codes, to mirror the existing codes (at the time), maintained CPT code 77014, and established values that linked directly to the existing values/inputs for the PFS. Table 15 includes the HCPCS G-codes and their long descriptors. [[Page 32428]] [GRAPHIC] [TIFF OMITTED] TP16JY25.026 Over the past several years, the Radiation Oncology community met with CMS and CMMI to address the concerns identified by CMS in the 2015 code set as well as the possibility of creating an episode-based alternative payment approach for radiation therapy services. The G- codes were identified in a Relativity Assessment Workgroup (RAW) screen (CMS/Other source with 2019 estimated Medicare utilization over 20,000). The RAW did not agree with the specialty societies' request to maintain the current valuation. As a result, the CPT Editorial Panel reviewed the radiation oncology delivery treatment family at the September 2024 CPT meeting and established a technique-agnostic family of codes and bundled imaging into all three services. The Panel approved the revision of CPT codes 77402, 77407 and 77412 and the deletion of 77385, 77386 and 77014. The specialty societies have also requested that CMS delete the related G-codes, G6001 through G6017. As stated previously, we have not recognized the radiation treatment delivery CPT codes for payment under PFS and have instead used the G- codes to describe these services, based primarily on concerns related to how the conventional practice expense methodology applies to these services. For CY 2026, we are proposing to delete the 17 G-codes and recognize the newly revised CPT codes for payment under the PFS, in conjunction with our proposal to utilize OPPS cost data to establish PE RVUs, as previously described. We are proposing the RUC-recommended work RVU of 0.70 for the single code in the family that has a physician work component, CPT code 77387. We are proposing to utilize the relationship between the proposed OPPS APC relative weights for APCs 5621, 5622, and 5623 to inform the valuation of PE-only CPT codes 77402, 77407, and 77412 when paid under the PFS. As described above, we believe that the relationship between the OPPS APC relative weights more accurately reflects the relative resource costs associated with furnishing these services. To facilitate the use of the relationship of the OPPS APC relative weights to establish PE RVUs for radiation treatment delivery services, we believe it is important to standardize the billing units and bundling rules between the settings. That is, services in this code family that describe technical costs and are not separately payable under the OPPS will not be separately payable under the PFS, because the associated costs are incorporated into the costs for separately paid codes. As a result, the proposed PE RVUs for the [[Page 32429]] services in this code family, which are developed based on the relationship of the APC relative weights to which services in this family are assigned, include a redistribution of the PE RVUs from the newly bundled services to the other services in that family, as described below. In an effort to align the relationship between the PFS payment for this code family with the OPPS payment, we are proposing to assign Procedure Status ``B'' to the technical component of CPT code 77387 to maintain consistency with OPPS payment for this code, which is packaged into payment for the treatment delivery codes, CPT codes 77402, 77407, and 77412, and therefore is not separately payable under the OPPS. As described in section II.B. of this proposed rule, typically, 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. In the case of CPT code 77387, we are proposing that the PE and total RVU for the global service will equal the PE and total RVU for the professional component only because the technical component is not separately payable under the PFS since the relative resources are included in the valuation of another code (treatment delivery). We are proposing to display CPT code 77387 in Addendum B with the professional and technical components, where the technical component has non-payable Procedure Status ``B,'' as well as the global service equal to the payable professional component, We are also seeking comment on strategies to mitigate billing confusion that could result from this relatively novel circumstance where the technical component of a service is bundled but the professional component is separately reported. Specifically, we are seeking comments on whether displaying the global service equal to the professional component is problematic, and if it would be preferable to eliminate the global code and display only the professional and technical components in Addendum B. Similarly, for PE-only CPT code 77417 (Therapeutic radiology port image(s)), we are proposing to assign Procedure Status ``B'' to align with OPPS payment for this code, which is packaged into payment for the treatment delivery codes, CPT codes 77402, 77407, and 77412 and therefore would not be separately reportable under the PFS. Similarly, of course, it is packaged under the OPPS.

C. Superficial Radiation Therapy (CPT Codes 77X05, 77X07, 77X08, and

77X09) Superficial radiation therapy is currently provided using CPT code 77401 (Radiation treatment delivery, superficial and/or ortho voltage, per day) in conjunction with CPT code 77280 (Therapeutic radiology simulation-aided field setting; simple) and HCPCS code G6001 (Ultrasonic guidance for placement of radiation therapy fields). In October 2020, HCPCS code G6001 was identified by the RAW via the CMS/Other Medicare utilization over 20,000 screen. In January 2021, the RUC recommended referring G6001 to CPT to develop new code(s) that reflect the different process of care between the two specialties (dermatology and radiation oncology). After a 2-year delay to allow time for re-review, the CPT Editorial Panel created four codes and a new subsection to report surface radiation therapy in September 2024. These codes will replace CPT code 77401 and HCPCS code G6001 which were scheduled for deletion by the CPT Editorial Panel and recommended for deletion by CMS, respectively. This code family was surveyed for the January 2025 RUC meeting. The new codes are as follows: 77X05: Surface radiation therapy; superficial or orthovoltage, treatment planning and simulation-aided field setting. 77X07: Surface radiation therapy, superficial, delivery, <150 kV, per fraction (e.g., electronic brachytherapy). 77X08: Surface radiation therapy, orthovoltage, delivery, 150-500 kV, per fraction. 77X09: Surface radiation therapy, superficial or orthovoltage, image guidance, ultrasound for placement of radiation therapy fields for treatment of cutaneous tumors, per course of treatment (List separately in addition to the code for primary procedure). We are proposing the RUC-recommended work RVU for the two codes in the family that have a work RVU. We are proposing a work RVU of 0.77 for CPT code 77X05 and a work RVU of 0.30 for CPT code 77X09. Similar to our approach for the radiation oncology treatment delivery codes discussed above, we believe that using the relationship between the relative weights of the OPPS APCs to which codes in this family are assigned likely more accurately reflect the actual costs of these services compared to use of direct PE input and PE allocation methodologies. Therefore, similar to our proposal for radiation treatment delivery services, we are proposing to use this relationship to establish the RVUs for the PE portion of these services. We are proposing to utilize the relationship between the proposed OPPS APC assignments for APCs 5621 and 5732 to inform the valuation of PE-only CPT codes 77X07 ((Surface radiation therapy, superficial, delivery, <150 kV, per fraction (eg, electronic brachytherapy))) and 77X08 (Surface radiation therapy, orthovoltage, delivery, 150-500 kV, per fraction), and for the technical component of CPT code 77X05 (Surface radiation therapy; superficial or orthovoltage, treatment planning and simulation-aided field setting) when paid under the PFS. In an effort to align the relationship between the PFS payment for this code family with the relationship of the OPPS information used to develop the RVUs, we are proposing to assign Procedure Status ``B'' to the technical component of CPT code 77X09 to align with OPPS of this code whose costs are packaged into payment for the treatment delivery CPT codes 77X07 and 77X08. We are proposing to display CPT code 77X09 in Addendum B with the professional and technical components, where the technical component is non-payable Procedure Status ``B,'' as well as the global service equal to the payable professional component, but are seeking comment on strategies to mitigate possible billing confusion that could result from this relatively novel circumstance where the technical component of a service is bundled but the professional component is separately reported. Specifically, we are seeking comments on whether displaying the global service equal to the professional component is problematic, and if it would be preferable to eliminate the global service and display the professional and technical components only in Addendum B. [[Page 32430]] [GRAPHIC] [TIFF OMITTED] TP16JY25.027

D. Proton Beam Treatment Delivery (CPT Codes 77520, 77522, 77523, and

77525) PFS payment amounts for proton beam treatment delivery services are currently determined by local Medicare Administrative Contractors (MACs). As discussed in CY 2021 rulemaking (85 FR 84625 through 84626), we have not previously established RVUs for these services due to the unique nature of the equipment costs associated with these services compared to other capital costs addressed by our usual PE methodology. Given the proposals described above to establish RVUs for the new and revised CPT codes for Radiation Oncology and Superficial Radiation Treatment Delivery Services, we are seeking comments on whether we should adopt a similar approach to establish RVUs for [[Page 32431]] proton beam treatment delivery services. We note that these services are assigned to APCs 5623 and 5625 under the OPPS with established Medicare payment rates (unlike the contractor pricing in place for these services under the PFS). We are specifically seeking comments on how we might establish national pricing and total RVUs for these services to maintain relativity within the PFS. For example, would using the overall ratio between OPPS and PFS payment for radiation oncology treatment services to establish initial year RVUs for proton beam treatment delivery services accurately reflect the relative resources involved in furnishing the services? Alternatively, would it be more appropriate to consider the overall difference between the OPPS and Medicare payment as currently determined by the MACs for these services, or are there other alternative methods we should consider? We welcome comments on this topic. (25) Combination COVID-19 Vaccine Administration (CPT Codes 90480 and 9X16X) In September 2024, the CPT Editorial Panel created a new add-on code, 9X16X (each additional component administered (List separately in addition to code for primary procedure)), to report when each additional non-COVID vaccine component is administered with the COVID- 19 vaccine. CPT code 90480 (Immunization administration by intramuscular injection of severe acute respiratory syndrome coronavirus 2 (SAR CoV2) (coronavirus disease [COVID19]) vaccine; first or only component of each vaccine administered) was revised as part of this family of services. We received RUC recommendations for CPT code 90480 that affirmed the September 2023 work and PE RUC recommendations. We previously established CPT code 90480 with a procedure status of ``X'' on the PFS and the code is therefore not payable under the PFS. Payment for this CPT code is also addressed under previously finalized policies associated with the emergency use authorization declaration. We refer readers back to the CY 2025 PFS final rule (89 FR 97710) for more information on this previously finalized policy. We also received RUC recommendations for add-on CPT code 9X16X. The RUC recommendations for this CPT code do not include work or PE inputs as the recommendations suggest that the work and PE is already included in the administration base code and this add-on code is intended for tracking purposes of the second vaccine. We are proposing to maintain procedure status ``X'' for CPT code 90480 and assign procedure status ``X'' to CPT code 9X16X. (26) Immunization Counseling (CPT Codes 90XX1, 90XX2, and 90XX3) In May 2024, the CPT Editorial Panel created three new time-based CPT codes 90XX1, 90XX2, and 90XX3 to report vaccine counseling performed where a vaccine is not administered. CPT code 90XX1 (Immunization counseling by physician or other qualified health care professional when immunization(s) is not administered by provider on the same date of service; 3 minutes up to 10 minutes), CPT code 90XX2 (Immunization counseling by physician or other qualified health care professional when immunization(s) is not administered by provider on the same date of service; greater than 10 minutes up to 20 minutes) and CPT code 90XX3 (Immunization counseling by physician or other qualified health care professional when immunization(s) is not administered by provider on the same date of service; greater than 20 minutes). These services were surveyed and reviewed at the September 2024 RUC meeting. In 2022, CMS created six new HCPCS codes so that Medicaid providers could bill for stand-alone vaccine counseling, ``State Health Official Letter #22-002 ``Medicaid and CHIP Coverage of Standalone Vaccine Counseling''.\53\ The six HCPCS codes are: --------------------------------------------------------------------------- \53\ https://www.medicaid.gov/state-resource-center/downloads/stnd-vacc-cou-spec-hcpcs-codes.pdf. --------------------------------------------------------------------------- G0310 (Immunization counseling by a physician or other qualified health care professional when the vaccine(s) is not administered on the same date of service, 5 to 15 mins time. (This code is used for Medicaid billing purposes.)) G0311 (Immunization counseling by a physician or other qualified health care professional when the vaccine(s) is not administered on the same date of service, 16-30 mins time. (This code is used for Medicaid billing purposes.)) G0312 (Immunization counseling by a physician or other qualified health care professional when the vaccine(s) is not administered on the same date of service for ages under 21, 5 to 15 mins time. (This code is used for Medicaid billing purposes.)) G0313 Immunization counseling by a physician or other qualified health care professional when the vaccine(s) is not administered on the same date of service for ages under 21, 16-30 mins time. (This code is used for Medicaid billing purposes.) G0314 Immunization counseling by a physician or other qualified health care professional for COVID-19, ages under 21, 16-30 mins time. (This code is used for the Medicaid Early and Periodic Screening, Diagnostic, and Treatment Benefit (EPSDT.) G0315 Immunization counseling by a physician or other qualified health care professional for COVID-19, ages under 21, 5-15 mins time. (This code is used for the Medicaid Early and Periodic Screening, Diagnostic, and Treatment Benefit (EPSDT.) The RUC requested that CMS delete HCPCS codes G0310-G0313, and replace them with the new CPT codes 90XX1, 90XX2, and 90XX3. However, we are proposing to assign status indicator (``I'') to each of these three services, as not valid for Medicare purposes. Medicare uses other coding for reporting of, and payment for immunization counseling. We are not proposing any work RVUs or PE RVUs for any of the three new CPT codes. (27) Colon Motility Services (CPT Codes 91XX1 and 91XX2) In April 2023, the Relativity Assessment Workgroup (RAW) identified CPT codes 91120 and 91122 as reported together 75 percent of the time or more based on 2021 Medicare claims data. The RUC noted that these services are reported together 95 percent of the time and recommended that the specialty societies work with the CPT Editorial Panel to develop a code bunding solution. In May 2024, the CPT Editorial Panel created two new codes, CPT code 91XX1 (Rectal sensation, tone, and compliance study (for example, barostat)) and CPT code 91XX2 (Anorectal manometry, with rectal sensation and rectal balloon expulsion test, when performed) to describe these services to replace CPT codes 91120 and 91122. The two new codes were surveyed for the September 2024 RUC meeting. For CY 2026, the RUC-recommended a work RVU of 3.05 for CPT code 91XX1 and 2.70 for CPT code 91XX2. We are proposing these RUC recommendations without refinement. For the direct PE inputs, we disagree with the RUC-recommended 17 minutes of clinical labor associated with CA013 (Prepare room, equipment and supplies) for CPT code 91XX2.We are proposing a time of 2 minutes for CA013, which is the standard time for this PE input. We are proposing the RUC recommendation of 17 minutes of clinical labor time for CA013 for CPT code 91XX1 to account for a previous [[Page 32432]] input of 15 minutes to calibrate equipment in similar codes. We recognize it is not typical to have different values for the same clinical labor activity across a code family, and we welcome comments as to the appropriateness of these refinements. We disagree with the RUC-recommended 30 minutes of clinical labor associated with CA024 (Clean room/equipment by clinical staff) for CPT 91XX1 as we believe this is unnecessarily long, and does not match similar services. We are proposing a CA024 time of 10 minutes for both codes (CPT 91XX1 and 91XX2) based off reference CPT code 45300 (Proctosigmoidoscopy, rigid; diagnostic, with or without collection of specimen(s) by brushing or washing (separate procedure)). We are also proposing to refine the SM015 supply (Enzymatic detergent) to a quantity of 4 ounces for both codes, to match similar inputs for similar services. We seek comment on the appropriateness of this refinement, as we do not believe that 120 ounces of the SM015 supply would be typical or necessary given that no HCPCS code on the entire PFS uses more than 8 ounces of this supply. We are proposing all of the other RUC recommendations for direct PE for CPT codes 91XX1 and 91XX2 without refinement. (28) Dark Adaptation Diagnostic and Screening Services (CPT Codes 92284 and 922X1) In 2023, the specialty societies prepared and submitted a Category I Code Change Application to create CPT code 922X1 (Screening dark adaptation measurement (for example, rod recovery intercept time), with interpretation and report), which describes the screening test for retinal and optic nerve disease. This code was created to differentiate between diagnostic dark adaptation testing and screening testing that has possibly been reported under CPT code 92284 (Diagnostic dark adaptation examination (for example, rod and cone sensitivities, rod- cone breakpoint), with interpretation and report). CPT also added a parenthetical to CPT code 92284, to describe how the diagnostic dark adaptation test is conducted in order to identify patients with macular degeneration or inherited retinal diseases when they have symptomatic visual loss without any identifiable cause or clinical examination. CPT code 92XX1 describes a screening service that has not been determined to be a preventive service under Section 1861 of the Social Security Act and as such is not covered under Medicare. We are proposing to assign status indicator (``N'') to this service, as a non- covered service. We will list the RUC-recommended RVUs for display purposes only. In the CY 2023 PFS final rule we finalized a work RVU of 0.00 for CPT code 92284 as proposed (87 FR 69513). The RUC had surveyed this procedure in 2021, reviewed the survey results for the procedure and recommended 1 minute of pre-service time, 3 minutes of intra-service time, 1 minute of immediate post-service time, totaling 5 minutes, all of which reduced the surveyed times. The RUC also recommended a work RVU of 0.14. We disagreed with the RUC-recommended work RVU of 0.14 for CPT code 92284. We found that the recommended work RVU did not adequately reflect reductions in physician time, since the diagnostic screening is usually completed during an E/M visit and largely consists of interpreting machine generated results. For this latest review of CPT code 92284 in CY 2026, we disagree with the RUC-recommended work RVU of 0.32 and are proposing a work RVU of 0.29 for CPT code 92284 based on reference to code CPT 92132 (Computerized ophthalmic diagnostic imaging (e.g., optical coherence tomography [OCT]), anterior segment, with interpretation and report, unilateral or bilateral), for which we finalized 0.29 work RVU in the CY 2025 PFS. Our proposed work RVU is also supported by reference to CPT code 71110 (Radiologic examination, ribs, bilateral; 3 views), with a work RVU of 0.29. Both reference codes have intra-service work times of 6 minutes and total times of 8 minutes. While the intra-service work time of both reference codes is 1 minute less than the RUC-recommended median survey time for CPT code 92284, they each have 1 minute for pre- service and post-service times. We believe it is more appropriate to use these reference codes than the RUC-recommended cross walk to CPT 92282 (Imaging of retina for detection or monitoring of disease; with remote physician or other qualified health care professional interpretation and report, unilateral or bilateral) with a work value of 0.32 RVU because we believe the RUC-recommended intra-service work time and work RVU are overstated relative to the current instar-service work time and work RVU for CPT code 92284. Additionally, we also searched for crosswalks to CPT codes the same intra-service time and a range of similar pre-and post-service times and found that the recommended work RVU of 0.32 fell near the top of this range, which would not maintain relativity of the work values among the identified CPT codes. We are proposing the RUC-recommended direct PE inputs for CPT code 92284 without refinement. (29) Coronary Therapeutic Services and Procedures (CPT Codes 92920, 92924, 92928, 92933, 92937, 92941, 92943, 92973, 92X01, 92X02, 93571, and 93572) In the CY 2013 PFS final rule (77 FR 69063 through 69064), we reviewed 13 new codes to describe percutaneous coronary intervention (PCI) services and assigned bundled status to all the add-on codes for the additional branches off the major coronary arteries because we believed that separately paying for branch-level stents may encourage increased placement of stents. To bundle the work of each new add-on code into its respective base code, we used the RUC-recommended utilization crosswalk to determine what percentage of the base code utilization would be billed with the add-on code, and added that percentage of the RUC-recommended work RVU and physician time for the add-on code to the RUC-recommended work RVU and physician time of the base code. In September 2022, the CPT Editorial Panel created one new Category I CPT code for percutaneous coronary lithotripsy. The new add-on CPT code 92972 (Percutaneous transluminal coronary lithotripsy) was reviewed by the RUC on an interim basis for CY 2024 while the entire PCI code family was referred to the CPT Editorial Panel for restructuring. Subsequently, the code family was revised at the February 2024 CPT Editorial Panel meeting, including the deletion of the bundled add-on codes, and surveyed for the April 2024 RUC meeting. The following is a list of the CPT codes and their long descriptors: CPT codes 92920 (Percutaneous transluminal coronary angioplasty, single major coronary artery and/or its branch(es)), 92924 (Percutaneous transluminal coronary atherectomy, with coronary angioplasty when performed, single major coronary artery and/or its branch(es)), 92928 (Percutaneous transcatheter placement of intracoronary stent(s), with coronary angioplasty when performed, single major coronary artery and/or its branch(es); one lesion involving one or more coronary segments), 92933 (Percutaneous transluminal coronary atherectomy, with intracoronary stent, with coronary angioplasty when performed, single major coronary artery and/ or its branch(es)), 92937 (Percutaneous transluminal [[Page 32433]] revascularization of or through coronary artery bypass graft (internal mammary, free arterial, venous), any combination of intracoronary stent, atherectomy and angioplasty, including distal protection when performed, single vessel major coronary artery and/its branches), 92941 (Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, any combination of intracoronary stent, atherectomy and angioplasty, including aspiration thrombectomy when performed, single major coronary artery and/or its branches or single bypass graft and/or its subtended branches), 92943 (Percutaneous transluminal revascularization of chronic total occlusion, single coronary artery, coronary artery branch, or coronary artery bypass graft, and/or subtended major coronary artery branches of the bypass graft any combination of intracoronary stent, atherectomy and angioplasty; antegrade approach), 92973 (Percutaneous transluminal coronary thrombectomy aspiration mechanical (List separately in addition to code for primary procedure)), 92X01 (Percutaneous transcatheter placement of intracoronary stent(s), with coronary angioplasty when performed, single major coronary artery and/or its branch(es); two or more distinct coronary lesions with two or more coronary stents deployed in two or more coronary segments, or a bifurcation lesion requiring angioplasty and/or stenting in both the main artery and the side branch), 92X02 (Percutaneous transluminal revascularization of chronic total occlusion, single coronary artery, coronary artery branch, or coronary artery bypass graft, and/or subtended major coronary artery branches of the bypass graft any combination of intracoronary stent, atherectomy and angioplasty; combined antegrade and retrograde approaches), 93571 (Intravascular Doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress, when performed; initial vessel (List separately in addition to code for primary procedure)), and 93572 (Intravascular Doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress, when performed; each additional vessel (List separately in addition to code for primary procedure)).We are proposing the RUC-recommended work RVU for all twelve codes in the family. We are proposing a work RVU of 8.35 for CPT code 92920, a work RVU of 10.13 for CPT code 92924, a work RVU of 10.00 for CPT code 92928, a work RVU of 11.94 for CPT code 92933, a work RVU of 11.30 for CPT code 92937, a work RVU of 12.72 for CPT code 92941, a work RVU of 13.69 for CPT code 92943, a work RVU of 1.75 for CPT code 92973, a work RVU of 12.00 for CPT code 92X01, a work RVU of 15.00 for CPT code 92X02, a work RVU of 1.80 for CPT code 93571, and a work RVU of 1.44 for CPT code 93572. However, we note these work RVUs as recommended by the RUC set new upper ranges for multiple codes in the RUC Database. For example, the proposed work RVU of 12.00 for CPT code 92X01 sets a new upper range on RUC Database searches for 000-day global codes with an intraservice time of 75 minutes, with a previous maximum value of 10.25 work RVUs for CPT code 49614 (Repair of anterior abdominal hernia(s) (that is, epigastric, incisional, ventral, umbilical, spigelian), any approach (that is, open, laparoscopic, robotic), recurrent, including implantation of mesh or other prosthesis when performed, total length of defect(s); less than 3 cm, incarcerated or strangulated), with the same intraservice time and 165 minutes of total time. Similarly, we shared in the RUC's difficulties finding major surgical procedures with the 000-day global period with similar times to use as potential reference or bracket codes. The RUC did not recommend, and we are not proposing any direct PE inputs for these facility-based services. (30) RSV Monoclonal Antibody Administration (CPT Codes 96380 and 96381) In September 2023, CPT created two Category I codes, 96380 (Administration of respiratory syncytial virus, monoclonal antibody, seasonal dose by intramuscular injection, with counseling by physician or other qualified health care professional) and 96381 ((Administration of respiratory syncytial virus, monoclonal antibody, seasonal dose by intramuscular injection) to report administration of respiratory syncytial virus (RSV), monoclonal antibody and seasonal dose, with and without counseling. These codes were effective October 6, 2023 for immediate use. At the time, the RUC did an immediate review of these codes and issued interim recommendations to CMS. The RUC reviewed these codes again at the April 2024 RUC meeting. We are proposing the RUC-recommended work RVU of 0.28 for CPT code 96380 and 0.17 for CPT code 96381. We are proposing the RUC-recommended direct PE inputs without refinement. (30) Remote Monitoring (CPT codes 98975, 98976, 98977, 98978, 98980, 98981, 98XX4, 98XX5, 98XX6, 98XX7, 99091, 99453, 99454, 99457, 99458, 99473, 99474, 99XX4, and 99XX5) In September 2024, the Current Procedural Terminology (CPT) Editorial Panel added one code and made code revisions to report remote physiologic monitoring (RPM) device supply for 2 to 15 days and 16-30 days within a 30-day period to report RPM parameters; created one new code and code revisions to report RPM treatment management services for the first 10 minutes, first 20 minutes, and each additional 20 minutes thereafter; added three remote therapeutic monitoring (RTM) device supply codes to report respiratory, musculoskeletal and cognitive behavioral therapy for 2 to 15 days and 16 to 30 days within a 30-day period; created one new code and made code revisions to report RTM treatment management services for the first 10 minutes, first 20 minutes, and each additional 20 minutes thereafter; and revised remote monitoring guidelines. Remote physiologic monitoring (RPM) represents the remote monitoring of parameters such as weight, blood pressure, and pulse oximetry to monitor a patient's condition and inform their management. The remote physiologic monitoring code set currently includes CPT codes 99453, 99454, 99091, 99457, 99458, 99473, and 99474 (code descriptors can be found in Table 17). For CY 2026, the CPT Editorial Panel created two new RPM codes to describe RPM services that describe less than 16 days of data transmission per 30-day period and less than 20 minutes of interactive communication per month: CPT codes 99XX4 and 99XX5. The CPT Editorial Panel also made edits to specify the minimum days of data transmission per 30-day period for CPT code 99454 (new code descriptors and revised code descriptors can be found in Table 18). None of the RPM codes (CPT codes 99091, 99474, 99XX5, 99457, and 99458) met the minimum survey requirements established by the RUC for the January 2025 RUC meeting. As a result, the RUC-recommended that CPT codes 99091, 99474, 99XX5, 99457, and 99458 be resurveyed after 1 year of utilization data is available for this CPT 2026 code structure. All RPM codes are expected to be reviewed at the January 2028 RUC meeting. Remote therapeutic monitoring (RTM) represents the monitoring of adherence [[Page 32434]] to at-home therapeutic interventions. RTM can be provided for a variety of conditions, and there are distinct device supply codes that have been created for three types of therapeutic monitoring: respiratory system, cognitive behavioral therapy, and musculoskeletal system monitoring. The remote therapeutic monitoring code set currently includes CPT codes 98975, 98976, 98977, 98978, 98980, and 98981 (code descriptors can be found in Table 17). For CY 2026, the CPT Editorial Panel created four new RTM codes to describe RTM services that describe less than 16 days of data transmission per 30-day period and less than 20 minutes of interactive communication per month: CPT codes 98XX4, 98XX5, and 98XX7. The CPT Editorial Panel also made edits to specify the minimum days of data transmission per 30-day period for CPT codes 98976, 98977, and 98978 (new code descriptors and revised code descriptors can be found in Table 18). All of the codes in the RTM family are considered new technology (CPT codes 98975, 98XX4, 98976, 98XX5, 98977, 98XX7, 98XX7, 98980, and 98981) and will be placed on the New Technology list to be reviewed after 3 years of data are available (April 2030). [GRAPHIC] [TIFF OMITTED] TP16JY25.028 [[Page 32435]] [GRAPHIC] [TIFF OMITTED] TP16JY25.029 [GRAPHIC] [TIFF OMITTED] TP16JY25.030 [[Page 32436]] [GRAPHIC] [TIFF OMITTED] TP16JY25.031

A. Valuation for Remote Physiologic Monitoring (RPM)

For CPT code 99091, we disagree with the RUC's recommendation of 0.70 work RVUs and are proposing to maintain the current work RVU of 1.10 and the corresponding physician time inputs. This code, as well as the other RPM codes, did not meet the minimum survey requirements established by the RUC for the January 2025 RUC meeting. The RPM coding will be resurveyed after 1 year of utilization data is available for this 2026 CPT code structure, and we look forward to reviewing the additional data at that time to refine the valuation for this code more accurately. The RUC did not recommend, and we are not proposing any direct PE inputs for CPT code 99091. For CPT code 99XX5, we disagree with the RUC's recommendation of 0.39 work RVUs and are proposing a work RVU of 0.31, with 10 minutes or intra-service/total time. We disagree with the recommended value and propose a work RVU of 0.31 for CPT code 99XX5 based on the total time ratio between the 20 minutes of total time assigned to CPT code 99457 and the 10 minutes of total time assigned to CPT code 99XX5. This ratio equals 50 percent, and 50 percent of the current work RVU of 0.61 rounds to a work RVU of 0.31. Although we do not believe that the decrease in time described in the code descriptor must equate to a one- to-one or linear decrease in the valuation of work RVUs, since the two components of work are time and intensity, significant reductions in time for codes with equivalent intensity should generally be reflected in decreases to work RVUs. In the case of CPT code 99XX5, we believe it would be more accurate to propose the total time ratio at a work RVU of 0.31 to account for these decreases in work time compared to CPT code 99457. We also propose using this time ratio with the current PE inputs for CPT code 99457 for clinical staff time. We are proposing 5 minutes of CA021 intra-service clinical labor time and 15 minutes of CA037 post-service clinical labor time for CPT code 99XX5. For CPT code 99457, we disagree with the RUC's recommendation of 0.45 work RVUs and are proposing to maintain the current work RVU of 0.61, the current work time of 20 minutes, and the current direct PE inputs. This code, as well as the other RPM codes, did not meet the minimum survey requirements established by the RUC for the January 2025 RUC meeting. RPM coding will be resurveyed after 1 year of utilization data is available for this 2026 CPT code structure, and we look forward to reviewing the additional data at that time to refine the valuation for this code more accurately. For CPT code 99458, we disagree with the RUC's recommended direct PE inputs and are proposing to maintain the current inputs. We are proposing the RUC-recommended work RVU of 0.61 for CPT code 99458, as this work RVU was reviewed by the RUC and resulted in no recommended changes for CY 2026. Our proposal to maintain current work RVUs and PE inputs is due to the lack of survey data supporting changes to these codes' valuation, as none of the RPM codes met the minimum survey requirements established by the RUC for the January 2025 RUC meeting. We also believe it is important to maintain relativity between RPM and RTM codes describing equivalent amounts of treatment management time and effort. For CPT code 99474, we are proposing the RUC-recommended work RVU of 0.18 and direct PE inputs without refinement, as this code was reviewed by the RUC and resulted in no recommended changes for CY 2026. For CPT code 99473, which is a PE-only code, we are proposing the RUC-recommended direct PE inputs without refinement, as this code was reviewed by the RUC and resulted in no recommended changes for CY 2026. For CPT code 99453, which is a PE-only code, we are proposing the RUC-recommended PE inputs without refinement. For the PE-only CPT codes 99XX4 and 99454, the RUC's recommendations include a ``digital remote physiologic monitoring device app,'' which is a per-click vendor fee that has not traditionally been included as a form of direct PE. We understand that as these technologies evolve, the issues involving the use of software and other forms of digital tools become more difficult to account for accurately in our standard PE methodology. We acknowledge that for CPT codes 99XX4 and 99454, the overall payment rate is driven by practice expense supply and equipment inputs rather than physician work or clinical staff time We have concerns with the RUC-recommended PE inputs for device supply and equipment, as these inputs are difficult to accurately account for due to lack of substantive invoices and other types of supportive data. As MedPAC noted in their comment to the CY 2011 PFS proposed rule, ``using price information voluntarily submitted by specialty societies, individual practitioners, suppliers, and product developers might not result in objective and accurate prices because each group has a financial stake in the process''. We have repeatedly stated, such as in the CY 2018 final rule, that ``we do not believe that very small numbers of voluntarily submitted invoices are likely to reflect typical resource costs and create the potential for overestimation of supply and equipment costs'' (82 FR 52998). Given our concerns with the RUC-recommended PE inputs and our inability to verify the pricing for these inputs, we believe that using Hospital Outpatient Prospective Payment System (OPPS) cost data to value CPT codes 99XX4 and 99454 may more accurately reflect the actual costs of these technologies. We assume the costs incurred in furnishing these PE-only [[Page 32437]] codes would be the same across settings of care (physician office and hospital outpatient), since these codes do not have any physician work and only account for PE associated with device supply and data transmission. Under section 1848(c)(2)(N) of the Act, we have authority to establish or adjust PE RVUs using cost, charge, or other data from suppliers or providers of services. We propose to use OPPS cost data to establish the valuation for the practice expense portion of Remote Physiologic Monitoring CPT codes 99XX4 and 99454. We believe that the OPPS cost data is more accurate than the PE inputs recommended by the RUC. OPPS practice expense data obtained from cost reports is regularly updated, auditable, and required to adhere to national standards for reporting. For example, in the CY 2015 PFS final rule (79 FR 67569), we noted that ``routinely updated, auditable resource cost information submitted contemporaneously by a wide array of providers across the country is a valid reflection of ``relative'' resources and could be useful to supplement the resource cost information developed under our current methodology based upon a typical case that are developed with information from a small number of representative practitioners for a small percentage of codes in any particular year''. We are proposing to utilize the OPPS total geometric mean cost for CPT code 99454 to inform the valuation of CPT codes 99XX4 and 99454 when paid under the PFS. We are proposing to calculate this value by dividing the OPPS Geometric Mean Cost (GMC) for CPT code 99454, which is represented in a dollar amount, by the estimated CY 2026 PFS conversion factor (CF), which represents the dollar value of an RVU, in order to convert the GMC dollar amount into RVUs. The resulting value will be our proposed PE RVU for CPT codes 99XX4 and 99454. We are proposing the same valuation for both CPT codes 99XX4 and 99454 since the device is supplied to the beneficiary for the full 30-day period, regardless of the number of days that data is transmitted. We are seeking comments on these proposals.

B. Valuation for Remote Therapeutic Monitoring (RTM)

For CPT code 98XX7, we disagree with the RUC's recommendation of 0.66 work RVUs and are proposing a work RVU of 0.31, with 10 minutes or intra-service/total time. We are proposing this work RVU for CPT code 98XX7 based on the total time ratio between CPT code 98980's time of 20 minutes and CPT code 98XX7's time of 10 minutes. This ratio equals 50 percent, and 50 percent of the current work RVU of 0.62 for CPT code 98980 equals a work RVU of 0.31 for CPT code 98XX7. Although we do not believe that the decrease in time described in the code descriptor must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant reductions in time for codes with equivalent intensity should generally be reflected in decreases to work RVUs. In the case of CPT code 98XX7, we believe it would be more accurate to propose the total time ratio at a work RVU of 0.31 to account for these decreases in work time compared to CPT code 98980. We are also proposing using this time ratio with the current direct PE inputs for CPT code 98980. We are proposing 5 minutes of CA021 intra-service clinical labor time and 15 minutes of CA037 post-service clinical labor time for CPT code 98XX7. We are proposing this clinical labor using the RN/LPN/MTA (L037D) blend as this has historically been the typical clinical labor type for remote therapeutic monitoring services. For CPT code 98980, we disagree with the RUC's recommendation of 0.78 work RVUs and are proposing to maintain the current work RVU of 0.62, the current 20 minutes of intra-service/total work time, and the current direct PE inputs. For CPT code 98981, we disagree with the RUC's recommendation of 0.70 work RVUs and are proposing to maintain the current work RVU of 0.61 and the current direct PE inputs; the RUC recommended, and we are proposing to maintain the current 20 minutes of intra-service/total work time. These proposals are due to wanting to maintain relativity between RPM and RTM codes describing equivalent amounts of treatment management time and effort. RTM coding will be placed on the New Technology list to be reviewed after 3 years of data are available for this CPT 2026 code structure, and we look forward to reviewing the additional data at that time to refine the valuation for this code more accurately. For the PE-only CPT code 98975, the RUC's recommendations include a ``Remote musculoskeletal therapy monitoring program enrollment fee.'' We are not proposing a price for this input at this time as we believe this type of fee has not traditionally been included as a form of direct PE and would constitute forms of indirect PE under our methodology. We understand that as the PE data age, these issues involving the use of software and other forms of digital tools become more complex. However, in general we believe that this type of cost is most similar to indirect PE costs rather than direct costs, which must be individually allocable to a particular patient for a particular service. Additionally, we believe that indirect technology costs associated with RTM are better accounted for in the data transmission RTM codes (CPT codes 98XX5 and 98977, discussed below) that will also be reported during the beneficiary's course of treatment. We look forward to continuing to seek out new data sources to help in updating the PE methodology. The RTM coding will be placed on the New Technology list to be reviewed after 3 years of data are available for this 2026 CPT code structure, and we look forward to reviewing the additional data at that time to refine the valuation for this code more accurately. We are proposing to maintain the current direct PE inputs for CPT code 98975. For the PE-only CPT codes 98XX5 and 98977, the RUC's recommendations include a ``Remote musculoskeletal therapy monitoring monthly supply fee,'' which is a per-click vendor fee that has not traditionally been included as a form of direct PE. We understand that as these technologies evolve, the issues involving the use of software and other forms of digital tools become more difficult to account for accurately in our standard PE methodology. We acknowledge that for CPT codes 98XX5 and 98977, the overall payment rate is driven by practice expense supply and equipment inputs rather than physician work or clinical staff time. We have concerns with the RUC-recommended PE inputs for device supply and equipment, as these inputs are difficult to accurately account for due to lack of substantive invoices and other types of supportive data. As MedPAC noted in their comment to the CY 2011 PFS proposed rule, ``using price information voluntarily submitted by specialty societies, individual practitioners, suppliers, and product developers might not result in objective and accurate prices because each group has a financial stake in the process''. We have repeatedly stated, such as in the CY 2018 final rule, that ``we do not believe that very small numbers of voluntarily submitted invoices are likely to reflect typical resource costs and create the potential for overestimation of supply and equipment costs'' (82 FR 52998). Given our concerns with the RUC-recommended PE inputs and our inability to verify the pricing for these inputs, we believe that using Hospital Outpatient Prospective Payment System [[Page 32438]] (OPPS) cost data to value CPT codes 98XX5 and 98977 may more accurately reflect the actual costs of these technologies as opposed to the PE inputs as recommended by the AMA RUC. We assume the costs incurred in furnishing these PE-only codes would be the same across settings of care (physician office and hospital outpatient), since these codes do not have any physician work and only account for PE associated with device supply and data transmission. Under section 1848(c)(2)(N) of the Act, we have authority to establish or adjust PE RVUs using cost, charge, or other data from suppliers or providers of services. We propose to use OPPS cost data to establish the valuation for the practice expense portion of Remote Therapeutic Monitoring CPT codes 98XX5 and 98977. We believe that the OPPS cost data is more accurate than the PE inputs recommended by the RUC. OPPS practice expense data obtained from cost reports is regularly updated, auditable, and required to adhere to national standards for reporting. For example, in the CY 2015 PFS final rule (79 FR 67569), we noted that ``routinely updated, auditable resource cost information submitted contemporaneously by a wide array of providers across the country is a valid reflection of ``relative'' resources and could be useful to supplement the resource cost information developed under our current methodology based upon a typical case that are developed with information from a small number of representative practitioners for a small percentage of codes in any particular year''. We are proposing to utilize the OPPS total geometric mean cost for CPT code 98977 to inform the valuation of CPT codes 98XX5 and 98977 when paid under the PFS. We are proposing to calculate this value by dividing the OPPS Geometric Mean Cost (GMC) for CPT code 98977, which is represented in a dollar amount, by the estimated CY 2025 PFS conversion factor (CF), which represents the dollar value of an RVU, in order to convert the GMC dollar amount into RVUs. The resulting value will be our proposed PE RVU for CPT codes 98XX5 and 98977. We are proposing the same valuation for both CPT codes 98XX5 and 98977 since the device is supplied to the beneficiary for the full 30-day period, regardless of the number of days that data is transmitted. We are also proposing to maintain the current clinical staff type for the RTM codes (RN/LPN/MTA), as opposed to the RUC recommendation of physical therapy assistant, since the dominant specialty type that bills this code, family medicine, did not participate in the survey. We are also soliciting comments specifically on data to support the recommended PE inputs for this code, including invoices, additional data, or evidence to support the position. The RUC-recommended and we are proposing to contractor price the PE-only CPT codes 98XX4 and 98976. CPT codes 98XX6 and 98978 are PE-only codes. We are proposing to contractor price CPT code 98XX6 and proposing to maintain contractor pricing for CPT code 98978. We are seeking comments on these proposals.

C. Comment Solicitation

We are seeking comments on whether there are differences in the valuation of remote physiologic and remote therapeutic monitoring, specifically whether the services have similar costs and/or practice expense inputs. We are currently proposing similar valuations for what we have historically viewed as similar remote monitoring services (for example, RTM and RPM treatment management, RTM and RPM device supply, RTM and RPM data transmission), but are interested in gaining more information regarding any differences in work (in the case of timed codes, if there are varying levels of intensity between remote therapeutic vs. physiologic monitoring), clinical staff time, supplies, equipment, etc. We are particularly interested in comments that include data or evidence to support the position. (31) Hearing Device Services (CPT Codes 9X01X, 9X02X, 9X03X, 9X04X, 9X07X, 9X08X, 9X09X, 9X10X, 9X11X, 9X12X, 9X13X, and 9X14X) At the February 2024 CPT Editorial Panel meeting, 12 new Category I codes were created to report hearing devices services (for example, air-conduction hearing aids) including hearing aid candidacy determination, hearing aid selection, hearing aid fitting, follow-up after fitting, hearing aid verification, and assistive-device services. The current CPT codes, 92590-92595, were recommended for deletion. CPT codes 9X01X-9X14X were reviewed at the April 2024 RUC HCPAC meeting for CY 2026. The following is a list of the new CPT codes and their long descriptors: CPT code 9X01X (Evaluation for hearing aid candidacy, unilateral or bilateral, including review and integration of audiologic function tests, assessment, and interpretation of hearing needs (for example, speech-in-noise, suprathreshold hearing measures) discussion of candidacy results, counseling on treatment options with report, and, when performed, assessment of cognitive and communication status; first 30 minutes), CPT code 9X02X (Evaluation for hearing aid candidacy, unilateral or bilateral, including review and integration of audiologic function tests, assessment, and interpretation of hearing needs (for example, speech-in-noise, suprathreshold hearing measures) discussion of candidacy results, counseling on treatment options with report, and, when performed, assessment of cognitive and communication status; each additional 15 minutes), CPT code 9X03X (Hearing aid selection services, unilateral or bilateral, including review of audiologic function tests and hearing aid candidacy evaluation, assessment of visual and dexterity limitations, and psychosocial factors, establishment of device type, output requirements, signal processing strategies and additional features, discussion of device recommendations with report; first 30 minutes), CPT code 9X04X (Hearing aid selection services, unilateral or bilateral, including review of audiologic function tests and hearing aid candidacy evaluation, assessment of visual and dexterity limitations, and psychosocial factors, establishment of device type, output requirements, signal processing strategies and additional features, discussion of device recommendations with report; each additional 15 minutes), CPT code 9X07X (Hearing aid fitting services, unilateral or bilateral, including device analysis, programming, verification, counseling, orientation, and training, and, when performed, hearing assistive device, supplemental technology fitting services; first 60 minutes), CPT code 9X08X (Hearing aid fitting services, unilateral or bilateral, including device analysis, programming, verification, counseling, orientation, and training, and, when performed, hearing assistive device, supplemental technology fitting services; each additional 15 minutes), CPT code 9X09X (Hearing aid post-fitting follow-up services, unilateral or bilateral, including confirmation of physical fit, validation of patient benefit and performance, sound quality of device, adjustment(s) (for example, verification, programming adjustment(s), device connection(s), and device training), as indicated, and, when performed, hearing assistive device, supplemental technology fitting services; first 30 minutes), CPT code 9X10X (Hearing aid post-fitting follow- [[Page 32439]] up services, unilateral or bilateral, including confirmation of physical fit, validation of patient benefit and performance, sound quality of device, adjustment(s) (for example, verification, programming adjustment(s), device connection(s), and device training), as indicated, and, when performed, hearing assistive device, supplemental technology fitting services; each additional 15 minutes), CPT code 9X11X (Behavioral verification of amplification including aided thresholds, functional gain, speech in noise, when performed), CPT code 9X12X (Hearing-aid measurement, verification with probe- microphone), CPT code 9X13X (Hearing device verification, electroacoustic analysis), and CPT code 9X14X (Hearing assistive device, supplemental technology fitting services (for example, personal frequency modulation (FM)/digital modulation (DM) system, remote microphone, alerting devices)). The RUC is recommending contractor pricing for all twelve codes in the family. However, section 1862(a)(7) of the Act prohibits Medicare payment under Part A or Part B for any expenses incurred for hearing aids or examinations therefore, it has been our established policy not to pay for these hearing device services on the PFS, as their predecessor CPT codes 92590-92595 all have non-payable status codes. Therefore, we are proposing to maintain the same policy of assigning non-payable status codes to each of the twelve new CPT codes in this family. (32) Scalp Cooling Services (CPT Codes 9XX01, 9XX02, and 9XX03) At the September 2024 CPT Editorial Panel meeting, CPT deleted two Category II CPT codes and created three new Category I CPT codes, CPT code 9XX01(Mechanical Scalp cooling, including individual cap supply with head measurement, fitting, and patient education), 9XX02(mechanical scalp cooling; including hair preparation, individual cap placement, therapy initiation, and pre-cooling period), and 9XX03(mechanical scalp cooling; each 30 minutes)) to report scalp cooling services to address chemotherapy induced alopecia. The new codes were surveyed for the January 2025 RUC meeting and the RUC determined that the code family requires no physician work and are practice expense (PE) only services. As such, the RUC did not recommend, and we are not proposing work RVUs for these codes. We disagree with the RUC-recommended 5 minutes of service period clinical staff time in direct PE input CA021 (Perform procedure/ service--not directly related to physician work time) for CPT code 9XX01. We are proposing 27 minutes of clinical labor time for CA021 based off reference CPT code 99453 (Remote monitoring of physiologic parameter(s) (for example, weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education on use of equipment). We have received feedback from interested parties that 5 minutes does not adequately account for the full duration of time required to educate, measure, fit, and calibrate the cap. We agree with interested parties and believe that the 27 minutes of clinical staff time in CA021 for CPT code 99453 better accounts for the full duration of time required for this service. We are proposing all other direct PE inputs, supplies, and equipment as recommended by the RUC for CPT code 9XX01. We are also proposing all direct PE inputs, supplies, and equipment as recommended by the RUC for CPT codes 9XX02 and 9XX03 without refinement. 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1. Evaluation and Management (E/M) Visit Complexity Add-On

In the CY 2024 PFS final rule (88 FR 78970 through 78982), we finalized separate payment for the office/outpatient evaluation and management (O/O E/M) visit complexity add-on code, HCPCS code G2211 (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 condition or a complex condition. (Add-on code, list separately in addition to office/outpatient evaluation and management visit, new or established). In the CY 2024 PFS final rule, we noted that the O/O E/M visit complexity add-on code ``reflects the time, intensity, and PE resources involved when practitioners furnish the kinds of O/O E/M visit services that enable them to build longitudinal relationships with all patients (that is, not only those patients who have a chronic condition or single high-risk disease) and to address the majority of a patient's health care needs with consistency and continuity over longer periods of time.'' (88 FR 78970 through 78971). We explained in the CY 2024 PFS final rule that it is the relationship between the patient and the practitioner that is the determining factor for when the add-on code should be billed. The add-on code captures the inherent complexity of the visit that is derived from the longitudinal nature of the practitioner and patient relationship. The first part of the code descriptor, the ``continuing focal point for all needed health care services,'' describes a relationship between the patient and the practitioner when the practitioner is the continuing focal point for all health care services that the patient needs. The second part of the add-on code also describes a relationship involving medical services that are part of ongoing care related to a patient's single, serious condition or a complex condition. There is previously unrecognized but important cognitive effort of utilizing the longitudinal relationship in making a diagnosis, developing a treatment plan, and weighing the factors that affect a longitudinal doctor-patient relationship. The practitioner must decide what course of action and choice of words in the visit itself would lead to the best health outcome in the single visit while simultaneously building up an effective, trusting longitudinal relationship with the patient. Weighing these various factors, even for a seemingly simple condition, makes the entire visit inherently complex, which is what this add-on code is intended to capture (88 FR 78973 through 78974). Interested parties have recommended that CMS either establish separate payment for an evaluation and management inherent complexity add-on code specific to home-based visits or expand use of the O/O E/M visit complexity add-on code HCPCS code G2211 to be reported alongside home and residence E/M visits furnished to beneficiaries in nursing facilities, assisted living facilities, and the beneficiary's home. Interested parties have explained that home-based primary care practices provide access to primary care services for patients who otherwise would not be able to leave the house to see a primary care practitioner, and include the development of longitudinal, ``high- touch'' relationships with their patients. In the CY 2024 PFS final rule (88 FR 78818, 78971), we stated that the values we established for the revised O/O E/M CPT codes in the CY 2021 PFS final rule were finalized in concert with separate payment for HCPCS code G2211 (85 FR 84569, 87 FR 69588), and that we finalized work RVUs for the nursing facility E/M visit codes (87 FR 69604 through 69606) and the home or residence services code family (87 FR 69608 and 69609) subsequently in the CY 2023 PFS final rule. We stated that we may nevertheless consider in future rulemaking whether home or residence evaluation and management services bear unrecognized resource costs and whether HCPCS code G2211 should be applicable to home or residence E/M visits. We have noted that the application of the add-on code is not based on the characteristics of particular patients (even though the rationale for valuing the code is based on recognizing the typical complexity of patient needs), but rather the relationship between the patient and the practitioner (88 FR 78973). In part, HCPCS code G2211 recognizes the resource costs involved in building trust in a long-term practitioner-patient relationship that are [[Page 32496]] not reflected in the valuation of the O/O E/M code set. The same appears to be true about the home and residence evaluation and management code set. Building trust as part of a longitudinal practitioner-patient relationship may be particularly significant in the context of home and residence E/M visits. Typically, home visits occur at least monthly and people with serious illness may receive weekly visits. These visits involve developing and following through on a longitudinal care plan with proactive contacts regarding all of a person's health care needs. The follow-through based on a trusting practitioner/patient relationship is critical to keeping patients stable and preventing exacerbations. For this reason, we believe it is appropriate to extend the application of HCPCS code G2211 to home and residence E/M visits at this time. Therefore, we are proposing to allow HCPCS code G2211 to be billed as an add-on code with the home or residence evaluation and management visits code family (CPT codes 99341, 99342, 99344, 99345, 99347, 99348, 99349, 99350). The HCPCS code G2211 descriptor would read as follows, ``(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 condition or a complex condition. (Add- on code, list separately in addition to home or residence or office/ outpatient evaluation and management service, new or established))''.

1. Integrating Behavioral Health Into Advanced Primary Care Management

(APCM) In the CY 2025 PFS final rule (89 FR 97859 through 97902), we finalized separate coding and payment for Advanced Primary Care Management (APCM) services (HCPCS codes G0556, G0557, and G0558). [[Page 32497]] [GRAPHIC] [TIFF OMITTED] TP16JY25.090 [[Page 32498]] [GRAPHIC] [TIFF OMITTED] TP16JY25.091 [[Page 32499]] [GRAPHIC] [TIFF OMITTED] TP16JY25.092 [[Page 32500]] [GRAPHIC] [TIFF OMITTED] TP16JY25.093 In the CY 2017 PFS final rule (81 FR 80230), we began making separate payment to practitioners who provide behavioral health integration (BHI) services to patients using the Psychiatric Collaborative Care Model (CoCM) (a specific model of care provided by a primary care team consisting of a primary care provider and a health care manager who works in collaboration with a psychiatric consultant) using HCPCS codes G0502, G0503, and G0504. In the CY 2018 PFS final rule (82 FR 53077 through 53078), these codes were replaced by CPT codes 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), 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), and 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)), respectively. In the CY 2017 PFS final rule (81 FR 80230), we also began making separate payment to practitioners who provide general BHI services to patients, using HCPCS code G0507. BHI is a term that refers broadly to collaborative care that integrates behavioral health services with primary care. BHI is a team-based approach to care that focuses on integrative treatment of patients with medical and mental or behavioral health conditions. In the CY 2018 PFS final rule (82 FR 53077 through 53078), HCPCS code G0507 was replaced by CPT code 99484. CPT code 99484 is for care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional, per calendar month, with the following required elements: initial assessment or follow-up monitoring, including the use of applicable validated rating scales, behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes, [[Page 32501]] facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation, and continuity of care with a designated member of the care team. Patients with chronic health conditions are ``more likely to have related behavioral health concerns and find it easier to improve chronic conditions when these concerns are also addressed.'' \54\ Integrating behavioral health with primary care has been shown to improve outcomes like reduced depression severity, and enhancing patient's experience of care.\55\ In the CY 2025 PFS final rule (89 FR 97897), we summarized comments that we had received on our APCM services proposals discussing the importance of behavioral health on overall health and urging us to consider including behavioral health in future rulemaking as it relates to advanced primary care, citing the growing need for fully integrated physical and behavioral health. In our response, we agreed with commenters that behavioral health integration services are complementary to APCM services and that behavioral health is important in the context of overall health. We stated that we will take comments recommending strategies for further integration into consideration for future rulemaking. We further stated that we continue to be interested in the use of behavioral health integration services as they relate to advanced primary care and welcome input from interested parties, including how evolving changes in practice may warrant reconsideration of payment and coding policies. --------------------------------------------------------------------------- \54\ https://integrationacademy.ahrq.gov/about/integrated- behavioral- health#:~:text=Integrated%20behavioral%20health%20offers%20many,these %20concerns%20are%20also%20addressed. \55\ Balasubramanian, Bijal, Deborah Cohen, Katelyn Jetelina, Miriam Dickinson, Melinda Davis, Rose Gunn, Kris Gowen, Frank DeGruy 3rd, Benjamin Miller, Larry Green. ``Outcomes of Integrated Behavioral Health with Primary Care.'' J Am Board Fam Med. 2017 Mar- Apr;30(2):130-139.doi: 10.3122/jabfm.2017.02.160234. --------------------------------------------------------------------------- We believe that the physicians and practitioners who furnish APCM services should be able to provide BHI services and CoCM without needing to document their time spent performing the service because this would help facilitate a more holistic, team-based approach to care coordination and reduce burden. Otherwise, the practice would need to develop a time documentation system for BHI and CoCM, but not APCM. Functionally, we also believe that many practices that develop the interdisciplinary teams to provide advanced primary care are also the ones most likely ready to furnish BHI and CoCM services, so alignment in billing requirements would streamline processes. Therefore, for CY 2026, we are proposing to create optional add-on codes for APCM services that would facilitate providing complementary BHI services by removing the time-based requirements of the existing BHI and CoCM codes. We believe that removing the time-based requirements will reduce burden on practitioners by reducing the documentation requirements for billing. By reducing the documentation requirements, we also believe primary care practitioners may be more likely to offer and furnish BHI and CoCM services, which would improve access to BHI and CoCM for primary care patients. These proposed optional add-on codes for APCM services would be considered a ``designated care management service'' under Sec. 410.26(b)(5) and, as such, could be provided by auxiliary personnel under the general supervision of the billing practitioner. In the CY 2024 PFS final rule (88 FR 78939), we summarized comments received for Principal Illness Navigation services that discussed that patients with severe mental illness and substance use disorders may only see behavioral health practitioners regularly, which we believe makes the integration of behavioral health and primary care important for this population to improve access. We are opting to not create an add-on code for CPT code 99494 as this code is for an additional 30 minutes of initial or subsequent psychiatric collaborative care management in a calendar month, and the APCM codes, and proposed add-on codes do not require the counting of minutes in order to bill.

2. Behavioral Health Integration Add-On Codes for APCM (HCPCS Codes

GPCM1, GPCM2, GPCM3) We are proposing the establishment of three new G-codes to be billed as add-on services when the APCM base code (HCPCS codes G0556, G0557, and G0558) is reported by the same practitioner in the same month. HCPCS code GPCM1, an add-on code based on CPT code 99492, HCPCS code GPCM2, an add-on code based on CPT code 99493 for CoCM services delivered to patients also receiving APCM services, and HCPCS code GPCM3, an add-on code for general behavioral health integration services based on CPT code 99484. We are not proposing to create an add-on code for CPT code 99494, as that code describes additional time, and these codes do not require the counting of minutes. Our proposed code descriptors are listed below. HCPCS code GPCM1: Initial psychiatric collaborative care management, 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 (list separately and in addition to the Advanced Primary Care Management code). HCPCS code GPCM2: Subsequent psychiatric collaborative care management, 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 [[Page 32502]] prepared for discharge from active treatment (list separately and in addition to Advanced Primary Care Management code). HCPCS code GPCM3: Care management services for behavioral health conditions, directed by a physician or other qualified health care professional, per calendar month, with the following required elements: initial assessment or follow-up monitoring, including the use of applicable validated rating scales, behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes, facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation, and continuity of care with a designated member of the care team (list separately and in addition to Advanced Primary Care Management code).

3. Valuation of Behavioral Health Integration Add-on Codes for APCM

Services In consideration that the services described by the proposed add-on codes are meant to be directly comparable to the existing CoCM and BHI codes, we propose a direct crosswalk to the current work RVU values of CPT code 99492 for HCPCS code GPCM1 (work RVU 1.88), CPT code 99493 for HCPCS code GPCM2 (work RVU 2.05), and CPT code 99484 for HCPCS code GPCM3 (work RVU 0.93). We also propose a direct crosswalk to the current direct PE inputs for CPT codes 99492 (non-facility RVU 2.48, facility RVU 0.80), 99493 (non-facility RVU 1.93, facility RVU 0.86), and 99484 (non-facility RVU 0.66, facility RVU 0.30), to HCPCS codes GPCM1, GPCM2, and GPCM3, respectively. We welcome comments on this approach.

4. Request for Information Related to APCM and Prevention

Having a usual source of primary care can be positively associated with better receipt of recommended prevention services \56\ and effective management of chronic disease,\57\ which per the Trump Administration's Executive Order, ``Establishing the President's Make America Healthy Again Commission,'' \58\ is a top priority for CMS. APCM coding and payment has represented CMS' recent efforts to promote team-based primary care. In the CY 2025 PFS final rule (89 FR 97863), commenters recommended that cost sharing be eliminated for APCM services, indicating that any amount of cost sharing could be prohibitive and may limit the uptake of APCM services. A few commenters suggested that APCM services are preventive services that should be exempt from beneficiary cost sharing. --------------------------------------------------------------------------- \56\ Blewett, Lynn, Pamela Jo Johnson, Brian Lee, and Peter Scal. When a Usual Source of Care and Usual Provider Matter: Adult Prevention and Screening Services. Journal of General Internal Medicine. Volume 23, pages 1354-1360. Published May 28, 2008. \57\ Luo, Jiajun, Muhammad Kibriya, Paul Zakin, Andrew Craver, Liz Connellan, Saira Tasmin, Tamar Polonsky, Karen Kim, Habibul Ahsan, Briseis Aschebrook-Kilfoy. ``Urban Spatial Accessibility of Primary Care and Hypertension Control and Awareness on Chicago's South Side: A Study From the COMPASS Cohort. Circ Carvdiovasc Qual Outcomes. 2022 Sep; 15(9):e008845. Doi: 10.1161/ CIRCOUTCOMES.121.008845. Epub 2022 Sep 6. \58\ https://www.whitehouse.gov/presidential-actions/2025/02/establishing-the-presidents-make-america-healthy-again-commission/. --------------------------------------------------------------------------- At the time, we responded to comments stating that CMS did not see how APCM fit within the benefit categories for preventive services. After further consideration and analysis, there are some service elements of APCM that are substantively similar to certain aspects of the ``personalized prevention plan services'' described under section 1861(hhh)(1) of the Act. For example, the personalized prevention plan includes a health risk assessment, which includes identification of chronic diseases, injury risks, modifiable risk factors, and urgent health needs. This is substantively similar to the service element of APCM that requires an overall systematic needs assessment (which includes both medical and psychosocial needs). The personalized prevention plan includes ``improving self-management, or community- based lifestyle interventions to reduce health risks and promote self- management,'' which is substantively similar to the APCM service element of ``oversight of self-management.'' However, as APCM is a bundle of different care management and communication technology-based services, there are other service elements of the APCM codes that may be covered under Medicare Part B and carry cost sharing obligations. The blending of prevention and treatment services makes intuitive sense for those familiar with advanced primary care practices-- which must simultaneously balance ensuring patients receive their needed preventive services and treatment services. Indeed, effective care management often means balancing prevention and treatment in the life an individual patient. For example, for a patient with a recent history of a Deep Venous Thrombosis (DVT) on anticoagulation medication, a primary care team must often balance whether or not to hold the patient's anticoagulation in order for the patient to receive a colonoscopy (where removal of a polyp while the patient is on anticoagulation can lead to excessive bleeding).\59\ The primary care team must balance the relative risks of holding the anticoagulation medication, with the relative risks of delaying cancer screening, for the optimal health and wellbeing of the patient. --------------------------------------------------------------------------- \59\ O'Donnel, Michael and Seth A. Gross. ``Management of Anticoagulation and Colonoscopy.'' Current Treatment Options in Gastroenterology. Volume 19, pages 1-13(2021). Published January 16, 2021. --------------------------------------------------------------------------- Given these factors, we are seeking comments on how CMS should consider application of cost sharing for APCM services, particularly, if we were to include preventive services within the APCM bundles. How should we account for cost sharing if APCM includes both preventive services and other Part B services? Should CMS consider including the Annual Wellness Visit, depression screening, or other preventative services in the APCM bundle, and if so, which services and why? Should CMS consider other changes to APCM or additional coding to further recognize the work of advanced primary care practices in preventing and managing chronic disease? Additionally, we have often described how primary care teams are central to the relative success of Medicare Shared Savings ACOs. In 2023, as in previous years, ACOs comprised of larger proportions of primary care clinicians had significantly higher net per capita savings than ACOs comprised of smaller proportions of primary care clinicians. Should CMS consider new payments to Shared Savings Program ACOs for prospective monthly APCM payments to be delivered to primary care practices that satisfy the APCM billing requirements, with the payments reconciled under the ACO benchmark? If so, how should CMS consider consent and other features of APCM in these contexts? Should CMS consider other updates to APCM payments or Shared Savings Program policies that would drive increased participation of primary care practitioners in ACOs? [[Page 32503]]

1. Updates to Payment for Digital Mental Health Treatment (DMHT) and

Comment Solicitation on Payment Policy for Software as a Service (SaaS) a. Updates to Payment for DMHT In the CY 2025 PFS final rule (89 FR 97923 through 97928), we established Medicare payment to billing practitioners for digital mental health treatment (DMHT) devices furnished incident to professional behavioral health services used in conjunction with ongoing behavioral health care treatment under a behavioral health treatment plan of care. We use the term ``DMHT device'' to include the term digital cognitive behavioral therapy we used in prior rulemaking (88 FR 79012 through 79013) and in general to refer to software devices cleared, approved, or granted De Novo authorization by the Food and Drug Administration (FDA) that are intended to treat or alleviate a mental health condition, in conjunction with ongoing behavioral health care treatment under a behavioral health treatment plan of care, by generating and delivering a mental health treatment intervention that has a demonstrable positive therapeutic impact on a patient's health. We use the terms ``behavioral health conditions'' and ``mental disorders'' interchangeably and to mean psychiatric disorders as referenced in FDA regulation, 21 CFR 882.5801. This includes substance use disorders. The FDA definition of devices encompasses certain software intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or intended to affect the structure or any function of the body of man or other animals.\60\ As the field of innovative products including digital therapeutics and computerized behavioral therapy devices for behavioral health treatment develops and expands the FDA continues to apply a risk-based framework to review and classify computerized behavioral therapy devices. --------------------------------------------------------------------------- \60\ Sec. 201(h)(1) of the Federal Food, Drug, and Cosmetic Act. --------------------------------------------------------------------------- Effective January 1, 2025, we finalized three HCPCS G-codes for DMHT devices, to be billed by physicians and practitioners who are authorized to furnish services for the diagnosis and treatment of mental illness: G0552 (Supply of digital mental health treatment device and initial education and onboarding, per course of treatment that augments a behavioral therapy plan); HCPCS code G0553 (First 20 minutes of monthly treatment management services directly related to the patient's therapeutic use of the digital mental health treatment (DMHT) device that augments a behavioral therapy plan, physician/other qualified health care professional time reviewing data generated from the DMHT device from patient observations and patient specific inputs in a calendar month and requiring at least one interactive communication with the patient/caregiver during the calendar month); and HCPCS code G0554 (Each additional 20 minutes of monthly treatment management services directly related to the patient's therapeutic use of the digital mental health treatment (DMHT) device that augments a behavioral therapy plan, physician/other qualified health care professional time reviewing data generated from the DMHT device from patient observations and patient specific inputs in a calendar month and requiring at least one interactive communication with the patient/ caregiver during the calendar month). Additionally, we finalized the conditions of payment for these codes. To be payable under the PFS, the DMHT device must have been cleared under section 510(k) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) or granted De Novo authorization by FDA and in each instance classified at Sec. 882.5801. In addition, the billing practitioner must incur the cost of the DMHT device furnished to the beneficiary, and the furnishing of the DMHT device must be incident to the billing practitioner's professional services in association with ongoing behavioral health treatment under a plan of care by the billing practitioner. Furthermore, we finalized that the billing practitioner must diagnose the patient with a mental health condition and prescribe or order the DMHT device. We are clarifying here that the patient must have a mental health condition diagnosis, but the billing practitioner does not need to be the practitioner who made the diagnosis. The patient could then use the DMHT device in settings according to how the device has been classified by FDA for use at Sec. 882.5801, which could include the home or an office or other outpatient setting if consistent with the FDA classification for use. Also, payment may only be made for DHMT devices for mental health treatment in accordance with the use indicated in their FDA classification at Sec. 882.5801. We continue to be vigilant about waste, fraud and abuse as we develop payment policy for devices that may function like DMHT devices but whose technology platforms may differ from those of DMHT devices classified at Sec. 882.5801. We seek to ensure that DMHT devices are not only safe for patients but also beneficial for patients. Our objective in requiring that DMHT devices be classified at Sec. 882.5801 as a condition of payment was to set guardrails within our payment policy for patient safety and benefit. While partly in recognition of our inability to evaluate every DMHT device, in this way we limited payment to devices which are required to comply with the special controls requiring clinical data to validate the model of behavioral therapy as implemented by the device. While presently use cases for insomnia, substance use disorder, depression and anxiety have been classified by the FDA at 21 CFR 882.5801, future use cases are not necessarily limited to these. It is possible that additional DMHT devices for other use cases with similar characteristics may be classified under this code section. We anticipate that updating our payment policies will be an iterative process relating first to behavioral health treatment and by extension to chronic conditions. Behavioral health conditions are some of the most prevalent chronic diseases in the country. Among adults aged 18 or older in 2023, 22.8 percent (or 58.7 million people) had any mental illness and 48.5 million people aged 12 or older (or 17.1 percent) had a substance use disorder (SUD) in the past year. These behavioral health conditions are often chronic in nature. Individuals with Major Depressive Disorder, for example, often have recurrent episodes throughout their lives.\61\ --------------------------------------------------------------------------- \61\ https://www.samhsa.gov/data/sites/default/files/NSDUH%202023%20Annual%20Release/2023-nsduh-main-highlights.pdf. --------------------------------------------------------------------------- The technologies and platforms for digital therapeutics are evolving rapidly. We are at an early stage of Medicare payment for DMHT devices as supplies furnished incident to professional behavioral health services used in conjunction with ongoing behavioral health care treatment under a behavioral health treatment plan of care. In considering the next stage in the development of our payment policy, we have been reviewing interested parties' recommendations to make payment for FDA authorized devices under other classifications, including Computerized behavioral therapy device for treating symptoms of gastrointestinal conditions under 21 CFR 876.5960; Biofeedback device under 21 CFR 882.5050; Digital [[Page 32504]] therapy device to reduce sleep disturbance for psychiatric conditions under 21 CFR 882.5705; Digital therapy device for Attention Deficit Hyperactivity Disorder under 21 CFR 882.5803; and Computerized behavioral therapy device for the treatment of fibromyalgia symptoms to be codified at 21 CFR 882.5804. We note that Medicare coverage of biofeedback is limited by a long-standing national coverage determination. See, Medicare National Coverage Determinations Manual Chapter 1, Part 1 (Sections 10-80.12) Coverage Determinations, Section 30.1, Biofeedback, https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/ncd103c1_part1.pdf. We are proposing to expand our payment policies for HCPCS codes G0552, G0553, and G0554 to also make payment for DMHT devices cleared under section 510(k) of the FD&C Act or granted De Novo authorization by FDA and in each instance classified at Sec. 882.5803 Digital therapy device for Attention Deficit Hyperactivity Disorder (ADHD). The Sec. 882.5803 classification is for software intended to provide therapy for ADHD or any of its individual symptoms as an adjunct to clinician supervised treatment. Comparable to the special controls for device classification Sec. 882.5801 Computerized behavioral therapy device for psychiatric disorders, the Sec. 882.5803 device classification's special controls require the use of a validated measure to evaluate effectiveness of the device to provide therapy for ADHD or any of its individual symptoms. The special controls for device classification Sec. 882.5801 require that clinical data must be provided to describe a validated model of behavioral therapy for the psychiatric disorder; and to validate the model of behavioral therapy as implemented by the device. Comparable to the Sec. 882.5801 device classification, the Sec. 882.5803 device classification is intended to provide therapy as an adjunct to clinician supervised treatment. We believe that it is important to expand our coding and payment policies to include such devices classified at Sec. 882.5803 to more fully reflect the range of behavioral health disorders treated by FDA- authorized products. We also propose that all the conditions of payment for HCPCS codes G0552, G0553, and G0554 finalized in the CY 2025 PFS final rule would apply to DMHT devices classified at Sec. 882.5803. Additionally, we welcome comments on whether we should establish coding and payment policies for devices classified under the following FDA regulation sections that were recommended to us by interested parties: Computerized behavioral therapy devices for treating symptoms of gastrointestinal conditions at Sec. 876.5960; Digital therapy devices to reduce sleep disturbance for psychiatric conditions at Sec. 882.5705; and Computerized behavioral therapy device for the treatment of fibromyalgia symptoms to be codified at Sec. 882.5804. Medicare FFS claims data for HCPCS codes G0552, G0553, and G0554 have remained low in volume since we established these codes in the CY 2025 PFS final rule. We understand there may be several reasons for this. We are aware per interested parties and commenters that a condition of payment that we established for these codes, that the billing practitioner is incurring the cost of furnishing the DMHT device to the patient, may not align with direct to consumer delivery and payment models that existed before the final rule was issued. At this time, we do not believe we can appropriately price all the DMHT devices for which we would make payment under our current policies and proposals, and therefore, we are not proposing any changes to the existing contractor-priced status for HCPCS code G0552. As we have noted, the technologies and DMHT therapies are evolving rapidly. We recognize our payment policy, too, will evolve. Given the dynamic nature of the development of these devices and the variation in methods of action for potential technology platforms, we do not have sufficient information needed to establish national pricing for devices described by HCPCS code G0552 at this time. We recognize that the ongoing nationwide behavioral health workforce shortage combined with increasing demand for behavioral health care services may limit access to behavioral health services for some Medicare beneficiaries.\62\ We recognize that digital therapeutic devices may offer innovative means to access certain behavioral health care services. We acknowledge that the field of digital therapeutics is evolving and continue to solicit comments from the public on this topic, including the CPT Editorial Panel. We continue to aim to both provide access to vital behavioral health services and gather further information about the delivery of digital behavioral health therapies, their effectiveness, their adoption by practitioners as complements to the behavioral health care they furnish, and their use by patients for the treatment of behavioral health conditions. We continue to welcome information and may consider national pricing through future rulemaking. --------------------------------------------------------------------------- \62\ https://bhw.hrsa.gov/data-research/projecting-health-workforce-supply-demand. --------------------------------------------------------------------------- We are seeking comments on the possibility of establishing for CY 2026 additional separate coding and payment for a broader based set of services describing digital tools used by practitioners intended for maintaining or encouraging a healthy lifestyle, as part of a mental health treatment plan of care. Specifically, we are seeking information about clinical practice involving use of such tools. On what reliable evidence do practitioners inform their clinical judgment that use of such digital tools is warranted or beneficial to their treatment of the patient? What role do these digital tools typically have within plans of behavioral health treatment? What appropriate crosswalks would we consider for the purposes of nationally pricing a code to describe digital tools that do not require FDA clearance, approval or authorization and therefore do not entail the development costs of FDA clearance, approval or authorization or meet other conditions of payment for HCPCS code G0552, primarily that the practitioner must bear the cost of the DMHT device as a supply incident to their services. For example, we could consider the inputs assigned to CPT code 98016 (Brief communication technology-based service (for example, 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 evaluation and management service provided within the previous 7 days nor leading to an evaluation and management service or procedure within the next 24 hours or soonest available appointment, 5 to 10 minutes of medical discussion) or CPT code 99421 (Online digital evaluation and management service, for an established patient, for up to 7 days, cumulative time during the 7 days; 5 to 10 minutes). Since the resource costs reflected in the practice expense should be lower for services involving digital tools that do not require FDA clearance, approval, or authorization or meet the condition of payment that the billing practitioner bears the cost of supplying the DMHT device for HCPCS code G0552, we anticipate that the corresponding valuation for any additional coding would be appropriately lower than G0552. We welcome comments on these potential crosswalks or any other services that [[Page 32505]] may best approximate the resource costs involved in cases where practitioners furnish a digital tool as part of a mental health treatment plan of care and furnish initial education and onboarding, per course of treatment that augments a behavioral therapy plan, and monthly treatment management services directly related to the patient's use of these digital tools. We also welcome comments on these potential crosswalks or any other services that may best approximate the resource costs involved in cases where practitioners do not furnish the digital tool and do not furnish initial education and onboarding for the tool, but nonetheless incorporate use of the tool as part of a mental health treatment plan of care. Additionally, we are requesting comments on other related digital device policies for our consideration in future rulemaking. Specifically, we received a request from an interested party to create a new add-on G code to existing CPT codes 96112, 96113, 96116, 96121, 96130, 96131, 96132, and 96133 (code descriptors can be found in Table 26), for physicians' or non-physician practitioners' psychological/ neuropsychological evaluations so they may report administration of an FDA authorized eye-tracking technology to aid in the diagnosis of Autism Spectrum Disorder (ASD) in pediatric patients, including staff time with the patient, data submission and output. The interested party stated that the device collects data based on the clinical presentation of a patient, then an analysis algorithm is applied to the collected data to generate output. The interested party raised concerns that currently there are delays and waitlists to obtain diagnostic evaluations for children at risk for ASD. Their solution is to use this ASD diagnosis tool at the point of care after a parent or physician identifies a risk of ASD in a child. According to the interested party, this digital device can help reduce ASD diagnosis delays to be seen by a diagnostic specialist. The interested party is requesting the following code descriptor, Algorithm-driven neurological assessment for likelihood of Autism Spectrum Disorder (ASD) diagnosis, and of ASD-measures' severity (for example, social disability, verbal and non-verbal ability), derived from validated quantitative analysis of looking behavior, and recommends for CMS to either establish a national rate for the add-on code using a crosswalk to CPT code 93243 (External electrocardiographic recording for more than 48 hours up to 7 days by continuous rhythm recording and storage; scanning analysis with report), CPT code 93247 (External electrocardiographic recording for more than 7 days up to 15 days by continuous rhythm recording and storage; scanning analysis with report), or to allow contractor pricing. We are seeking comments from the public regarding whether creating an add-on G code and contractor pricing is needed for the administration of an FDA authorized eye-tracking technology and other technology to aid in the diagnosis of ASD in pediatric patients; or whether it would be more appropriate to go through the CPT Editorial Panel process to obtain a Category III CPT code for this treatment. [[Page 32506]] [GRAPHIC] [TIFF OMITTED] TP16JY25.094 b. Comment Solicitation on Payment Policy for Software as a Service (SaaS) In recent years, there have been rapid developments in the use of software-based technologies to support clinical decision-making in the outpatient and physician office settings, some of which may be devices requiring FDA, clearance, approval, or authorization. We refer to these software-based technologies as software as a service (SaaS). As the data used in our PE methodology has aged, and more services have begun to include innovative technology such as software algorithms and AI, these innovative applications are not well accounted for in our PE methodology. As described in section II.B of this proposed rule, PE resources typically involved in furnishing services are characterized as either direct or indirect costs. Direct costs involved in furnishing a service are estimated for each code and include clinical labor, medical supplies, and medical equipment. Indirect costs include administrative labor, office expenses, and all other expenses. Indirect PE is allocated to each service based on physician work, direct costs, and a specialty-specific indirect percentage. The source of the specialty specific indirect percentage was the Physician Practice Information (PPI) Survey, last administered in 2007 and 2008, when emerging technologies that rely primarily on software, licensing, and analysis fees, with minimal costs in equipment and hardware may not have been typical. Thus, these costs are not well accounted for in the PE methodology. While we have received updated PPI survey data from the AMA that did incorporate information on the practice costs associated with SaaS and AI services, this information would only reflect the impact of SaaS and AI on the PE/hr associated with a given medical specialty, rather than providing insight into the direct costs associated with use of this technology. Furthermore, as described in section II.B.5 of this proposed rule, due to several limitations with the data, we are [[Page 32507]] not proposing to implement the PE/HR data or cost shares from the AMA's PPI Survey data for CY 2026 ratesetting. Consistent with our PE methodology and as we have stated in past PFS rulemaking (83 FR 59557), we have considered most computer software and associated analysis and licensing fees to be indirect costs tied to costs for associated hardware that is considered to be medical equipment. However, beginning with payment for Fractional Flow Reserve Computed Tomography (Heartflow) in the CY 2022 PFS final rule (86 FR 65041) CMS has made intermediate, service-specific policies to allow for PFS payment of SaaS and AI applications in certain circumstances. We consider several distinct issues when evaluating SaaS technologies. First, we have observed wide variations in the purported costs of clinically similar SaaS technologies. The various costs that manufacturers consider when pricing their technologies, including research and development and software maintenance, are often not publicly verifiable. Additionally, due to the novel and evolving nature of these technologies, there are rarely existing medical items or services that can be utilized for comparison purposes to determine clinical and resource similarity. Finally, while there has been a rapid increase in the development and coding of services incorporating these technologies in recent years, there is a very limited amount of Medicare claims data for these services. As this technology has continued to evolve and diversify, interested parties have stated that the lack of a consistent payment policy for SaaS and AI devices is an impediment to patient access when these devices are otherwise cleared, approved, or authorized by the FDA. Interested parties have requested that CMS consider the development of a payment policy for these devices that is stable and consistent across settings of care, payment systems, and types of services incorporating SaaS and AI devices. Additionally, as we are interested in paying accurately for the management of chronic disease and primary care services, we are seeking to understand how the use of SaaS and AI technology affects those services and how to incorporate these costs into our current strategy for paying for evolving models of care delivery, such as Advanced Primary Care Management and risk-based payment arrangements generally. Therefore, we are requesting public comments on how we should consider paying for SaaS under the PFS, including: What factors should we consider when paying for SaaS? What has the experience been of risk-based payment arrangement participants with incorporating SaaS under their payment arrangements? Have risk-based payment arrangements reflected the underlying value of SaaS to the practice of medicine? Given the limitations of the PE methodology to account for this kind of technology, what alternative pricing strategies should CMS use to accurately pay for SaaS and AI devices under the PFS? For example, should CMS continue its current practice, as referenced in section II.E.23. of this proposed rule, of crosswalking values from the OPPS established payment amounts for the technical components of services incorporating SaaS and AI? Or should we integrate OPPS geometric mean costs for these devices into our ratesetting methodology as we are proposing to do in this proposed rule for RPM and RTM services, or set payment rates relative to OPPS rates as we are proposing to do for radiation oncology services? See sections II.E.24. and 30. this proposed rule. How should CMS value the physician work associated with utilizing and interpreting the clinical outputs associated with SaaS and AI devices? Is there an alternative data source outside of the limited Medicare claims data currently available and hospital invoices provided by manufacturers, which may not fully depict total hospital acquisition costs, that can accurately reflect the costs of the SaaS? How are these technologies used in the treatment of chronic disease? How may CMS best evaluate the quality and efficacy of SaaS and AI technologies? We welcome input from interested parties on these questions as well as any additional suggestions that would enhance our ability to provide accurate and consistent payment for procedures incorporating SaaS. We note that there is a comment solicitation in the CY 2026 OPPS proposed rule regarding SaaS devices furnished in hospital outpatient departments and ASCs.

2. Prevention and Management of Chronic Disease--Request for

Information Six in ten Americans have at least one chronic disease, and four in ten have two or more chronic diseases. Many preventable chronic diseases are caused by a short list of risk behaviors, including smoking, poor nutrition, physical inactivity, and excessive alcohol use.\63\ In 2023, among adults aged 18 or older, 22.8 percent (or 58.7 million people) had any mental illness (AMI) in the past year.\64\ Although Medicare Part B covers many preventive services,\65\ as defined in section 1861(ddd)(3) of the Act, Medicare preventive services have some restrictions.\66\ --------------------------------------------------------------------------- \63\ Centers for Disease Control. ``Chronic diseases in America.'' Available from: https://www.cdc.gov/chronic-disease/ about/index.html#:~:text=Six%20in%2010%20Americans%20have,inactivity% 2C%20and%20excessive%20alcohol%20use. \64\ Highlights for the 2023 National Survey on Drug Use and Heath, https://www.samhsa.gov/data/sites/default/files/NSDUH%202023%20Annual%20Release/2023-nsduh-main-highlights.pdf. \65\ https://www.medicare.gov/coverage/preventive-screening-services. \66\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c18pdf.pdf. --------------------------------------------------------------------------- Per the Trump Administration Executive Order, ``Establishing the President's Make America Healthy Again Commission,'' \67\ the Administration is directing our focus towards understanding and drastically lowering chronic disease rates, including thinking on nutrition, physical activity, healthy lifestyles, over-reliance on medication and treatments, the effects of new technological habits, environmental impacts, and food and drug quality and safety. Furthermore, the Executive Order directs that agencies must ensure the availability of expanded treatment options and the flexibility for health insurance coverage to provide benefits to support beneficial lifestyle changes and disease prevention. As such, focusing on the prevention and management of chronic disease is a top priority for us. --------------------------------------------------------------------------- \67\ https://www.whitehouse.gov/presidential-actions/2025/02/establishing-the-presidents-make-america-healthy-again-commission/. --------------------------------------------------------------------------- We are broadly soliciting feedback to help us better understand how we could enhance our support management for prevention and management of chronic disease. Specifically, we are requesting commenters consider the following information: How could we better support prevention and management, including self-management, of chronic disease? Are there certain services that address the root causes of disease, chronic disease management, or prevention, where the time and resources to perform the services are not adequately captured by the current physician fee schedule code set? If so, please provide specific examples. Are there current services being performed to address social isolation and loneliness of persons with [[Page 32508]] Medicare, where the time and resources to perform the services are not adequately captured by the current physician fee schedule code set? If so, what evidence has supported these services, and what do these services entail? What services have been delivered by Medicare providers or community-based organizations, including area agencies on aging and other local aging and disability organizations? What has been the impact? Are there current services being performed that improve physical activity, where the time and resources to perform the services are not adequately captured by the current physician fee schedule code set? How should CMS consider provider assessment of physical activity, exercise prescription, supervised exercise programs, and referral, given the accelerating use of wearable devices and advances in remote monitoring technology? Should CMS consider creating separate coding and payment for intensive lifestyle interventions, where the time and resources to perform the services are not adequately captured by the current physician fee schedule code set, and how should these interventions be prioritized? If so, what evidence has supported these services, and what do the services entail? How would additional coding and payment be substantively different from coding and payment for Intensive Behavioral Therapy? Should CMS consider creating separate coding and payment for medically-tailored meals, as an incident-to service performed under general supervision of a billing practitioner? If so, what would be the appropriate description of such a service, and under what patient circumstances (that is, after discharge from a hospital)? Do community- based organizations providing medically tailored meals currently employ a physician, nurse practitioner, physician assistant, or other practitioner who could both bill Medicare and supervise a medically- tailored meal service? Should CMS consider allowing billing providers to refer to community-based organizations to deliver and ensure quality of medically-tailored meals while under general supervision (please see Sec. 410.26(a)(3) for further information about general supervision) of the referring billing provider? If CMS were to create separate coding and payment for medically-tailored meals, how should CMS ensure integrity of the service being delivered? Please provide information on whether we should consider creating separate coding and payment for FDA-cleared digital therapeutics that treat or manage the symptoms of chronic diseases an incident-to service performed under the general supervision of a billing practitioner. Please see the CY 2025 PFS final rule (89 FR 97923 through 97928) for reference as to how we created new coding and payment for FDA-cleared digital mental health treatments (DMHTs). Are there technical solutions that would enhance the uptake of the annual wellness visit (AWV), or the improving accessibility, impact, and usefulness of the AWV? How can CMS better support practitioners and beneficiaries related to the AWV? Should CMS consider moving some of the required components of the AWV to optional add-on codes of the AWV instead, with the intent of decreasing burden, improving uptake, and allowing practitioners to select additional AWV elements that may be more relevant to particular patients? The Administration for Community Living (ACL) has defined evidence-based programs,\68\ which have demonstrated impact in effectively treating chronic disease, preventing disease, and helping older adults and people with disabilities to adopt healthy behaviors, improve their health status, reduce disability and injury, and reduce their use of hospital services and emergency room visits. In addition to programs impacting chronic disease management and prevention, there are evidence-based health programs that address older adult falls, mental health, physical activity, and more. Fifty-six State units on aging that work with over 600 area agencies on aging (AAAs) and their networks of service providers receive formula grants from ACL to administer programs, but the need exceeds available federal funding. Are there certain existing or new Physician Fee Schedule codes and payment, or Innovation Center Models, that could better support practitioner provision of successful interventions through partnerships between health care entities, AAAs, community care hubs, and other local aging and disability organizations? If so, please provide specific examples. --------------------------------------------------------------------------- \68\ Administration for Community Living. ``Health Promotion.'' https://acl.gov/programs/health-wellness/disease-prevention. --------------------------------------------------------------------------- In consideration that there are significantly more types of coding and payment that describe procedures in the physician fee schedule, please provide feedback regarding whether this detracts from the codes describing services that address underlying health behaviors, chronic disease management, and prevention. Aligning with this initiative to focus on the prevention and management of chronic disease, we are considering whether to create additional coding and payment for motivational interviewing. Motivational interviewing is a collaborative, goal-oriented style of communication with particular attention to the language of change. It is designed to strengthen personal motivation for and commitment to a specific health goal and exploring the person's own reasons for change within an atmosphere of acceptance and compassion.\69\ Compared to traditional advice-giving, motivational interviewing is more successful at improving a patient's underlying health behaviors that contribute to chronic disease, including but not limited to smoking, substance use, physical activity, nutrition, and adherence to medication and other treatments. Multiple meta-analyses have demonstrated that motivational interviewing has demonstrated statistically significant improvements in reduction of alcohol consumption, reduction in substance use in people with dependency or addiction, increased physical activity participation,\70\ increased weight loss, and reduction in blood pressure.\71\ Motivational interviewing has been adapted and integrated into many settings, including primary care facilities, emergency departments, behavioral health centers, and criminal justice and social service agencies.\72\ We are considering whether to develop separate coding and payment for motivational interviewing, which could also be performed under general supervision of the billing practitioner, in order to better account for the time and resources involved in furnishing this care. Furthermore, we understand that in many practices, health coaches can help support the provision of motivational interviewing services. We note that the Category III CPT codes [[Page 32509]] (0591T, 0592T, and 0593T) for health coaching are currently contractor- priced, and have a January 2030 sunset date. However, health coaches do not have a Medicare benefit category and therefore cannot bill Medicare directly (a new benefit category requires statutory change) but could potentially operate as clinical staff under general supervision incident-to a physician service if new coding and payment were constructed in this way. --------------------------------------------------------------------------- \69\ Miller, W.R. & Rollnick, S. (2013) Motivational Interviewing: Helping people to change (3rd Edition). Guilford Press. \70\ Frost, Helen et al. ``Effectiveness of Motivational Interviewing on Adult Behaviour Change in Health and Social Care Settings: a Systematic Review of Reviews.'' Available from: https://pubmed.ncbi.nlm.nih.gov/30335780/. \71\ VanBuskirk, Katherine, Julie Loebach Wetherell. ``Motivational interviewing with primary care populations: a systematic review and meta-analysis.'' Available from: https://pubmed.ncbi.nlm.nih.gov/23934180/. \72\ SAMHSA, Treatment Improvement Protocol 35: Enhancing Motivation for Change in Substance Abuse Treatment Updated 2019, https://library.samhsa.gov/sites/default/files/tip-35-pep19-02-01-003.pdf. --------------------------------------------------------------------------- We are soliciting feedback from the public regarding motivational interviewing and health coaches. Specifically, we are requesting commenters consider the following information: Please provide information on whether we should create separate coding and payment for motivational interviewing, or whether the resources involved in furnishing these services are appropriately recognized in current coding and payment. What is the best definition and description of motivational interviewing? What types of clinical staff should be able to perform motivational interviewing under the general supervision of a billing practitioner? How long does a session of motivational interviewing typically last? If we were to create coding and payment for motivational interviewing, what should the time-based requirements of the code be? We heard from interested parties that in many clinics, health coaches perform services under general supervision, and that there may be substantive overlap with motivational interviewing. To what extent are the services performed by health coaches encompassed by motivational interviewing? What training is required to effectively perform motivational interviewing? Are there agreed upon national training or certification standards for health coaches? If so, what are they? Do states have separate training or certification standards for health coaches? To what extent would health coaches be able to perform motivational interviewing incident-to billing practitioners under general supervision? Please see Sec. 410.26(a)(3) for further information about general supervision. In what clinical situations are motivational interviewing and health coaching most commonly performed? What are the clinical characteristics of a patient where motivational interviewing and health coaching would be medically reasonable and necessary? Can motivational interviewing and health coaching appropriately be performed via audiovisual or audio-only synchronous telecommunication? What has been the experience of providers and payers utilizing the codes 0591T (Health and well-being coaching: face-to- face, individual initial assessment), 0592T (Individual follow-up session, at least 30 minutes), and 0593T (Group session, two or more individuals, at least 30 minutes)? If the CPT committee were to create permanent codes with staff able to operate under the general supervision of a billing practitioner, would this capture the time and resources to perform health coaching? To what extent would new coding for motivational interviewing or health coaching better support some of the evidence- based programs funded and overseen by ACL that effectively manage or prevent chronic disease? We welcome feedback from stakeholders and the public on how we could better support management of chronic disease and prevention, including whether we should create separate coding and payment for motivational interviewing, along with overlap between motivational interviewing and health coaches for consideration for future rulemaking.

3. Community Health Integration and Principal Illness Navigation for

Behavioral Health a. Practitioner Types In the CY 2024 PFS final rule (88 FR 78920), we finalized G-codes to reflect new coding and payment for services describing Community Health Integration (CHI) services (HCPCS codes G0019 (Community health integration services performed by certified or trained auxiliary personnel, including a community health worker, under the direction of a physician or other practitioner; 60 minutes per calendar month) and G0022 (Community health integration services, each additional 30 minutes per calendar month)), provided by certified or trained auxiliary personnel, including a community health worker, under the direction of a physician or other practitioner. We also finalized Principal Illness Navigation (PIN) services (HCPCS codes G0023 (Principal Illness Navigation services by certified or trained auxiliary personnel under the direction of a physician or other practitioner, including a patient navigator or certified peer specialist; 60 minutes per calendar month) and G0024 (Principal Illness Navigation services, additional 30 minutes per calendar month); G0140 (Principal Illness Navigation--Peer Support by certified or trained auxiliary personnel under the direction of a physician or other practitioner, including a certified peer specialist; 60 minutes per calendar month) and G0146 (Principal Illness Navigation--Peer Support, additional 30 minutes per calendar month)), provided by certified or trained auxiliary personnel under the direction of a physician or other practitioner, including a patient navigator or certified peer specialist. In the CY 2025 PFS final rule (89 FR 97822), we clarified that when we refer to ``certified or trained auxiliary personnel'' in the following codes: G0019, G0022, G0023, G0024, G0140, G0146, this also includes clinical social workers (CSWs). Marriage and family therapists (MFTs) and mental health counselors (MHCs) have a similar statutory benefit category as CSWs and may also connect individuals with community-based resources to address unmet social needs that affect the diagnosis and treatment of medical problems. Like CSWs, MFTs and MHCs can bill Medicare directly for services they personally perform for the diagnosis or treatment of mental illness and substance use disorders, but are not authorized by statute to bill under the PFS for services that are provided by auxiliary personnel incident to their professional services. CHI and PIN services are typically provided by auxiliary personnel supervised by the billing practitioner, and MFTs and MHCs could serve as auxiliary personnel, as the codes do not limit the types of auxiliary personnel that can perform CHI and PIN services incident to the billing practitioner's professional services, so long as they meet the requirements to provide all elements of the service included in the code, consistent with the definition of auxiliary personnel at Sec. [thinsp]410.26(a)(1). MFTs and MHCs could not directly bill Medicare under the PFS for CHI and PIN services if they were provided by auxiliary personnel, as they are not authorized to supervise, bill, and be paid directly by Medicare for services that are provided by auxiliary personnel incident to their professional services. As we stated previously in the CY 2024 PFS final rule (88 FR 78926), ``the codes do not limit the types of other health care professionals, such as registered nurses and social workers, that can perform CHI services (and PIN services, as we discuss in the next section) incident to the billing practitioner's professional services, so long as they meet the requirements to provide all elements of the service included in the code, consistent with the definition of [[Page 32510]] auxiliary personnel at Sec. [thinsp]410.26(a)(1).'' We are clarifying that when we refer to ``certified or trained auxiliary personnel'' in the following HCPCS codes: G0019, G0022, G0023, G0024, G0140, G0146, this also includes MFT and MHCs. We are clarifying that, like CSWs, MFTs and MHCs can bill Medicare directly for CHI and PIN services they personally perform for the diagnosis or treatment of mental illness. Additionally, CMS required for auxiliary personnel performing CHI and PIN under general supervision, that in the absence of state level certification or training requirements, CMS required training to perform the services. We are further clarifying that if CSWs, MFTs, and MHCs are performing the services as auxiliary personnel under the general supervision of a billing practitioner, in the absence of state- level requirements, that they meet the certification or training requirements to perform all CHI and PIN service elements. This is relevant in the cases where a CSW, MFT, or MHC are performing CHI and PIN under the general supervision of a billing practitioner for a medical problem that is not considered a mental illness. For CHI and PIN services, as with all incidents to services, it is the billing practitioner's responsibility to ensure that all payment rules and applicable State requirements are met including licensure, certification, and/or training. This does not mean that the billing practitioners are required to provide the licensure, certification, and/or training themselves, but rather that they must ensure that the Medicare criteria for billing and payment of CHI and PIN services are met. Individuals who personally furnish or serve as auxiliary personnel for CHI and PIN services must meet all other service requirements associated with these codes. We welcome comments on this clarification. b. Initiating Visits In the CY 2024 PFS final rule (88 FR 78923), we finalized allowing E/M services (other than a low-level E/M visit done by clinical staff), including an E/M service that is part of a transitional care management (TCM) service and an annual wellness visit (AWV) service to serve as the initiating visit for CHI services. We received comments requesting for CPT codes 90791 (Psychiatric diagnostic evaluation) and 96156 (Health behavior assessment, or re-assessment (that is, health-focused clinical interview, behavioral observations, clinical decision making)) to be allowed to serve as initiating visits, but we determined at the time that these services would be better captured and better serve the needs being addressed with the PIN service elements. We have continued to analyze the uptake of CHI services and believe that these services may fit the need for additional initiating CHI visits, as utilization data is showing that CHI services are being used to address SDOH need(s) that significantly limit the practitioner's ability to diagnose or treat mental illness. For CSWs, MFTs, and MHCs to bill Medicare directly for CHI services personally performed for the diagnosis or treatment of mental illness, we are proposing to allow for CPT code 90791 (Psychiatric diagnostic evaluation) or the Health Behavior Assessment and Intervention (HBAI) services that CPT codes 96156, 96158, 96159, 96164, 96165, 96167, and 96168 (and any subsequent HBAI codes) to serve as initiating visits for CHI, as we believe these codes are the most analogous codes to the E/M codes that are currently used as initiating visits for CHI that are utilized by practitioners in a specialty whose covered services are limited by statute to services for the diagnosis and treatment of mental illness. All other policies for CHI initiating visits also apply to CHI services furnished by CSWs, MFTs, and MHCs. Please see the 2024 PFS final rule (88 FR 78921 through 78932) and 2025 PFS final rule (89 FR 97821 through 97824) for additional information regarding CHI services and CHI initiating visits. We welcome comments on this proposal.

4. Technical Refinements To Revise Terminology for Services Related to

Upstream Drivers of Health a. Policies To Improve Care for Chronic Illness and Behavioral Health Needs (1) Social Determinants of Health Risk Assessment (HCPCS Code G0136) In the CY 2024 PFS final rule (88 FR 78932 through 78937), we finalized coding and payment for HCPCS code G0136 (Administration of a standardized, evidence-based social determinants of health risk assessment tool, 5 to 15 minutes). After further review of utilization information, we have come to believe that the resource costs described by HCPCS code G0136 are already accounted for in existing codes, including but not limited to E/M visits. Therefore, we are proposing to delete this code for CY 2026. Accordingly, we are proposing to remove this code from the Medicare Telehealth Services list. Additionally, we are proposing conforming regulation text updates at 42 CFR 410.15. We are proposing to revise Sec. 410.15(a) as follows: in paragraph (a), by revising the definition of First annual wellness visit providing personalized prevention plan services by removing subparagraph (xiii) and redesignating subparagraph (xiv) as (xiii); and, in revising the definition of Subsequent annual wellness visit providing personalized prevention plan services by removing subparagraph (xi) and redesignating subparagraph (xii) as (xi). (2) Community Health Integration Services (HCPCS Codes G0019) In response to the CY 2024 PFS proposed rule, we received several comments requesting that CMS revise some of the language used in the Community Health Integration (CHI) (HCPCS codes G0019) code descriptor to better fit the purpose of CHI services. Some of the examples that commenters provided as an alternative to ``social determinants of health'' included: ``social drivers of health, drivers of health, or health-related social needs.'' Many of these commenters noted that other CMS programs use the term social drivers of health and requested that CMS use consistent naming conventions (88 FR 78933). After further consideration of the code descriptors, we are proposing to replace the term ``social determinants of health (SDOH)'' with the term ``upstream driver(s)''. We have determined that the term ``upstream driver(s)'' is more comprehensive and includes a variety of factors that can impact the health of Medicare beneficiaries. The term ``upstream driver(s)'' encompasses a wider range of root causes of the problems that practitioners are addressing through CHI services. This type of whole- person care can better address the upstream drivers that affect patient behaviors (such as smoking, poor nutrition, low physical activity, substance misuse, etc.) or potential dietary, behavioral, medical, and environmental drivers to lessen the impacts of the problem(s) addressed in the initiating visit. We are proposing the following changes to HCPCS codes G0019, and we will make conforming revisions to codes describing similar services to reflect the updated terminology, including services furnished by RHCs, FQHCs, and OTPs. G0019--Community health integration services performed by certified or trained auxiliary personnel, including a community health worker, under the direction of a physician or other practitioner; 60 minutes per calendar month, in the following activities to address upstream driver(s) that are significantly limiting ability to [[Page 32511]] diagnose or treat problem(s) addressed in an initiating E/M visit: Person-centered assessment, performed to better understand the individualized context of the intersection between the upstream driver(s) and the problem(s) addressed in the initiating E/M visit. ++ Conducting a person-centered assessment to understand patient's life story, strengths, needs, goals, preferences and desired outcomes, including understanding cultural and linguistic factors. ++ Facilitating patient-driven goal-setting and establishing an action plan. ++ Providing tailored support to the patient as needed to accomplish the practitioner's treatment plan. Practitioner, Home-, and Community-Based Care Coordination. ++ Coordinating receipt of needed services from healthcare practitioners, providers, and facilities; and from home- and community- based service providers, social service providers, and caregiver (if applicable). ++ Communication with practitioners, home- and community-based service providers, hospitals, and skilled nursing facilities (or other health care facilities) regarding the patient's psychosocial strengths and needs, functional deficits, goals, preferences, and desired outcomes, including cultural and linguistic factors. ++ Coordination of care transitions between and among health care practitioners and settings, including transitions involving referral to other clinicians; follow-up after an emergency department visit; or follow-up after discharges from hospitals, skilled nursing facilities or other health care facilities. ++ Facilitating access to community-based social services to address upstream driver(s). Health education--Helping the patient contextualize health education provided by the patient's treatment team with the patient's individual needs, goals, and preferences, in the context of the upstream driver(s), and educating the patient on how to best participate in medical decision-making. Building patient self-advocacy skills, so that the patient can interact with members of the health care team and related community-based services addressing the upstream driver(s), in ways that are more likely to promote personalized and effective diagnosis or treatment. Health care access/health system navigation. ++ Helping the patient access healthcare, including identifying appropriate practitioners or providers for clinical care and helping secure appointments with them. Facilitating behavioral change as necessary for meeting diagnosis and treatment goals, including promoting patient motivation to participate in care and reach person-centered diagnosis or treatment goals. Facilitating and providing social and emotional support to help the patient cope with the problem(s) addressed in the initiating visit, the upstream driver(s), and adjust daily routines to better meet diagnosis and treatment goals. Leveraging lived experience when applicable to provide support, mentorship, or inspiration to meet treatment goals.

J. Provisions on Medicare Parts A and B Payment for Dental Services

Inextricably Linked to Other Covered Services

1. Medicare Payment for Dental Services

a. Overview Section 1862(a)(12) of the Act generally precludes payment under Medicare Parts A or B for any expenses incurred for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth. (Collectively here, we will refer to ``the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth'' as ``dental services.'') That section of the statute also includes an exception to allow payment to be made for inpatient hospital services in connection with the provision of such dental services if the individual, because of their underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services. Our regulation at Sec. 411.15(i) similarly excludes payment for dental services except for inpatient hospital services in connection with dental services when hospitalization is required because of: (1) the individual's underlying medical condition and clinical status; or (2) the severity of the dental procedure. Fee for service (FFS) Medicare Parts A and B also make payment for certain dental services in circumstances where the services are not considered to be in connection with dental services within the meaning of section 1862(a)(12) of the Act. In the CY 2023 PFS final rule (87 FR 69663 through 69688), we clarified and codified at Sec. 411.15(i)(3) that Medicare payment under Parts A and B could be made when dental services are furnished in either the inpatient or outpatient setting when the dental services are inextricably linked to, and substantially related and integral to the clinical success of, other covered services. We also added several examples of clinical scenarios that are considered to meet that standard under Sec. 411.15(i)(3) and amended that regulation to add more examples in the CY 2024 PFS final rule (88 FR 79022 through 79029) and in the CY 2025 PFS final rule (89 FR 97936 through 97945). b. Submissions Received Through Public Submission Process In the CY 2023 PFS final rule, we established a process whereby we accept and consider submissions from the public (the ``public submission process'') to assist us to identify additional dental services that are inextricably linked to, and substantially related and integral to the clinical success of, other covered services (87 FR 69663 through 69688). We thank all those who submitted recommendations through this process. We received seven submissions from various organizations and individuals on or before February 10, 2025. Most of the submissions recommended that we consider clinical scenarios involving beneficiaries with diabetes mellitus when contemplating payment under Medicare for dental services that are inextricably linked to other covered services. Four submitters had similar themes in their submissions that expressed the concern that the absence of treatment of chronic dental infections could complicate covered medical treatment for the management of diabetes-associated retinopathy and nephropathy. Two submitters were focused on their view of how important it is to improve oral health through treatment of oral infections like periodontitis and preventive dental care, as they asserted these dental services are related to the successful prevention and treatment of diabetic retinopathy. These two submitters were specifically concerned about beneficiaries who are at risk for diabetes-related retinopathy and vision loss or who have diabetes- related retinopathy and vision loss. One submitter explained that their submission's purpose was not to nominate a new clinical scenario for consideration for CY 2026 rulemaking, but instead was to provide an update on their ongoing research efforts in response to CMS' previous questions about the connection between autoimmune disease and oral health. The submitter referred to their nomination for CY 2025 rulemaking and CMS' respective request for comment [[Page 32512]] which is discussed in the CY 2025 PFS proposed rule (89 FR 61760 through 61762). The letter emphasized that patients with autoimmune diseases often experience oral and dental complications, which can be exacerbated by immunosuppressive therapies. The submitter stated that they are currently analyzing Medicare claims data and commercial insurance data to demonstrate the positive impact of dental care on patients undergoing immunosuppressive treatment. They explained that they are particularly focused on investigating the relationship between regular preventive dental visits and systemic infection rates for those with Sjogren's disease. Since CY 2023, we have discussed our commitment to review submissions we receive through the public submissions process. We have also expressed our intention to continue to engage in discussions with the public on a wide spectrum of issues relating to Medicare payment for dental services that may be inextricably linked to other covered services. For CY 2026, we are not making any proposals in response to the submissions that we received and will take the information and recommendations submitted into consideration for the future.

A. Background

The CY 2014 Hospital Outpatient Prospective Payment System (OPPS)/ Ambulatory Surgical Center (ASC) final rule with comment period describes skin substitutes as ``. . . a category of products that are most commonly used in outpatient settings for the treatment of diabetic foot ulcers and venous leg ulcers . . .'' (78 FR 74930 through 74931). When a procedure utilizing a skin substitute product is performed, providers bill one or more Healthcare Common Procedure Coding System (HCPCS) codes to describe the preparation of the wound, the use of at least one skin substitute product, and application of the skin substitute product through suturing or various other techniques. Specifically, CPT codes 15271 through 15278 describe the application of skin substitutes to various size wounds and anatomical locations. Recently, several novel industry practices have come to our attention, likely driving substantial and unusual increases in the number of available skin substitute products, the sales and distribution structure for these products, and the rapidity of products changing manufacturer ownership. These industry changes are causing a significant increase in spending under Medicare Part B for skin substitute products in the non-facility setting. According to Medicare claims data, Part B spending for these products rose from approximately $250 million in 2019 to over $10 billion in 2024, a nearly 40-fold increase, while the number of patients receiving these products only doubled. Increases in payment rates and launch prices for skin substitutes, especially newer products, account for the majority of observed Medicare spending increases on these products. Of note, as part of its workplan, the U.S. Department of Health and Human Services' Office of the Inspector General announced in November 2024 plans to review Medicare Part B claims for skin substitutes to identify payments that were at risk for noncompliance with Medicare requirements with an expected issue date of fiscal year 2026.\73\ --------------------------------------------------------------------------- \73\ https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000894.asp. --------------------------------------------------------------------------- We outlined our HCPCS Level II coding and payment policy objectives for skin substitutes in the CY 2023 PFS proposed rule (87 FR 46249) because we concluded it would be beneficial for interested parties to understand our priorities as we work to create a consistent approach for the suite of products we have referred to as skin substitutes. As discussed in the CY 2023 PFS proposed rule, we have a number of objectives related to refining our Medicare policies in this area, including: (1) ensuring a consistent payment approach for skin substitute products across the physician office and hospital outpatient department settings; (2) ensuring that appropriate HCPCS codes describe skin substitute products; (3) employing a uniform benefit category across products within the physician office setting, regardless of whether the product is synthetic or comprised of human- or animal-based material, so we can incorporate payment methodologies that are more consistent; and (4) promoting clarity for interested parties on CMS skin substitutes policies and procedures. Interested parties have requested that CMS address what they have described as inconsistencies in our payment and coding policies, indicating that treating clinically similar products (for example, animal-based and synthetic skin products) differently for purposes of payment is confusing and problematic for healthcare providers and patients. These concerns exist specifically within the non-facility setting; however, interested parties have also indicated that further alignment of our policies across the non-facility and hospital outpatient department settings would reduce confusion. On April 25, 2024, the Medicare Administrative Contractors (MACs) released a proposed Local Coverage Determination (LCD) to provide appropriate coverage for skin substitute grafts used for chronic non- healing diabetic foot and venous leg ulcers. The MACs issued the collaborative proposed Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers LCD to make sure that Medicare covers, and people with Medicare have access to, skin substitute products that are supported by evidence that shows that they are reasonable and necessary for the treatment of diabetic foot and venous leg ulcers in the Medicare population and that coverage aligns with professional guidelines for appropriately managing these wounds. All of the MACs have delayed the effective date of the final local coverage determinations for cellular and tissue-based products for wounds (CTPs, or skin substitutes) in diabetic foot ulcers and venous leg ulcers, moving the implementation date across all MAC jurisdictions to January 1, 2026. For details, please see the final LCD, L36377, titled: Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers at: https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdId=36377&ver=19. We note that additional coverage determinations may apply to skin substitute products. The Medicare statute, regulations, and manual provisions empower the Medicare program to determine if a product is reasonable and necessary for the treatment of a beneficiary's condition and safe and effective, not experimental or investigational, and appropriate and therefore eligible for coverage under Part B. (See, for example, 42 U.S.C. 1395l(e), 1395y(a)(1)(A), 42 CFR 411.15(k)(1), 424.5(a)(6), Medicare Program Integrity Manual Sec. 3.6.2.2, Medicare Benefit Policy Manual ch. 15, Sec. Sec. 50.4.1-50.4.3, and Medicare Program Integrity Manual, ch. 13 Sec. Sec. 13.5.3, 13.5.4.) The inclusion of a product in this payment rule does not necessarily imply that a determination has been made by CMS or its contractors that it is reasonable and necessary and meets the other preconditions to Medicare coverage. Similarly, the use of short descriptors and associated FDA regulatory categories \74\ may reflect current FDA [[Page 32513]] regulation but are not intended to imply that FDA has determined that a product meets any specific FDA statutory or regulatory requirements. FDA's statutory and regulatory framework, including, for example, FDA's findings that a product is ``safe and effective,'' is not controlling of Medicare's determination under its own authorities of whether a product is ``reasonable and necessary'' for an individual patient and meets all preconditions for Medicare coverage and payment. FDA does not make Medicare coverage or payment determinations, nor do FDA statutes and regulations govern Medicare coverage or payment determinations. However, CMS has determined that, when it is setting payment rates on a prospective basis, a different inquiry and set of considerations apply and that it makes sense to consider how FDA regulates products that CMS considers to be skin substitutes. --------------------------------------------------------------------------- \74\ The term ``FDA regulatory categories'' is used in this Proposed Rule when referring to the basis for CMS's proposed payment policies but is not intended to reflect or imply that the products discussed within this Proposed Rule are characterized as such or grouped together by FDA. --------------------------------------------------------------------------- We continue to believe that our existing payment policies are unsatisfactory, unsustainable over the long term, and rooted in historical practice established two decades ago prior to significant evolutions in medical technology and practice. After hosting a town hall \75\ to provide an opportunity for public input, including discussion of potential approaches to the methodology for payment of skin substitute products, as well as reviewing several years of comments in response to CY rulemaking in 2023, 2024, and 2025 on this subject, we have developed a proposal that addresses our stated objectives as well as many of the comments we have received. --------------------------------------------------------------------------- \75\ CMS Skin Substitutes Town Hall, which was held virtually on January 18, 2023. More information regarding the CMS Skin Substitutes Town Hall such as links to recording and transcripts is available at https://www.cms.gov/medicare/payment/fee-schedules/ physician/skin- substitutes#:~:text=The%20CMS%20Skin%20Substitutes%20Town,Physician%2 0Fee%20Schedule%20(PFS). ---------------------------------------------------------------------------

1. Payment for Skin Substitutes When Used During a Covered Application

Procedure Under the PFS in the Non-Facility Setting CMS has historically considered skin substitutes to be biologicals for payment purposes under Medicare Part B. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173) (MMA) established payment methodology for drugs and biologicals under section 1847A of the Act. Under this methodology, a vast majority of drugs and biologicals separately paid under Medicare Part B are paid at the Average Sales Price (ASP) plus six percent. Section 303(c) of the MMA, titled ``Payment reform for covered outpatient drugs and biologicals,'' amended Title XVIII of the Act by adding new section 1847A of the Act. In part, this section established the use of the ASP to determine the payment limit for drugs and biologicals described in section 1842(o)(1)(C) of the Act (that is, drugs or biologicals billed by a physician, supplier, or any other person and not paid on a cost or prospective payment basis) furnished on or after January 1, 2005. Because Medicare is currently paying for most skin substitutes as biologicals using the methodology under section 1847A of the Act, each skin substitute product receives a unique billing code (typically, a Level II HCPCS code) and payment limit. Section 401 of Division CC, Title IV of the Consolidated Appropriations Act, 2021 (Pub. L. 116-260) (CAA, 2021) amended section 1847A of the Act to add new section 1847A(f)(2) of the Act, which requires certain manufacturers without a Medicaid drug rebate agreement, such as certain manufacturers of skin substitutes, to report ASP data to CMS for calendar quarters beginning on January 1, 2022, for drugs or biologicals payable under Medicare Part B and described in sections 1842(o)(1)(C), (E), or (G) or 1881(b)(14)(B) of the Act, including items, services, supplies, and products that are payable under Part B as a drug or biological. Because most skin substitutes are currently paid as biologicals using the methodology described in section 1847A of the Act, manufacturers of these products are currently required to report their ASP data to CMS every quarter. Prior to this, section 1927(b)(3)(A)(iii)(I) of the Act only required manufacturers with a Medicaid drug rebate agreement to report ASP data to CMS for drugs or biologicals described in section 1842(o)(1)(C) of the Act. Section 1847A of the Act also includes several relevant definitions. While the definition of ``single-source drug or biological'' provided at section 1847A(c)(6)(D) includes ``a biological,'' sections 1847A(c)(6)(H) and (I) of the Act offer more insight into the meaning of the term for purposes of this section. Subparagraph (I) defines the term ``reference biological product'' as a biological product licensed under section 351 of the PHS Act. Subparagraph (H) defines the term ``biosimilar biological product'' as ``a biological product approved under an abbreviated application for a license of a biological product that relies in part on data or information in an application for another biological product licensed under section 351 of the Public Health Service Act.'' Section 1927 of the Act, which is referred to multiple times in section 1847A of the Act, also references section 351 of the PHS Act when referencing biologicals. The title of section 303 of the MMA, which added section 1847A to the Act, refers to ``covered outpatient drugs,'' defined in section 1927(k)(2) of the Act. Subparagraph (B) adds biological products to this definition when those products are licensed under section 351 of the PHS Act, among other requirements. In the CY 2022 PFS final rule, to address the need to establish a payment mechanism for synthetic skin substitutes in the physician office setting and to be responsive to feedback received from commenters, we finalized an approach for payment of each synthetic skin substitute for which we had received a HCPCS Level II coding application. We finalized that those products would be payable in the physician office setting and billed separately from the procedure to apply them using HCPCS A-codes (86 FR 65120).

2. Payment for Skin Substitutes Under the Outpatient Prospective

Payment System (OPPS) Prior to CY 2014, all products considered to be skin substitutes were separately paid under the OPPS as if they were biologicals according to the ASP methodology (78 FR 74930 through 74931). In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74938), we unconditionally packaged skin substitute products furnished in the hospital outpatient setting into their associated application procedures as part of a broader policy to package all drugs and biologicals that function as supplies when used in a surgical procedure. As part of the policy to package skin substitutes, we also finalized a methodology that divides the skin substitutes into a high- cost group and a low-cost group, to ensure adequate resource homogeneity among APC assignments for the skin substitute application procedures (78 FR 74933). In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66886), we stated that skin substitutes are best characterized as either surgical supplies or devices because of their required surgical application and because they share significant clinical similarity with other surgical devices and supplies. [[Page 32514]] Skin substitutes assigned to the high-cost group are described by CPT codes 15271 through 15278. Skin substitutes assigned to the low- cost group are described by HCPCS codes C5271 through C5278. Claims billed with primary CPT codes 15271, 15273, 15275, or 15277 are used to calculate the geometric mean costs for procedures assigned to the high- cost group, and claims billed with primary HCPCS codes C5271, C5273, C5275, or C5277 are used to calculate the geometric mean costs for procedures assigned to the low-cost group (78 FR 74935). The graft skin substitute administration add-on codes, which include ``each additional 25 sq cm'' in the description (that is, CPT codes 15272, 15274, 15276, and 15278; HCPCS codes C5272, C5274, C5276, and C5278), are packaged into the payment rates for the primary administration codes. For CY 2025, each of the HCPCS codes described earlier are assigned to one of the following three skin procedure APCs according to the geometric mean cost for the code: APC 5053 (Level 3 Skin Procedures): HCPCS codes C5271, C5275, and C5277; APC 5054 (Level 4 Skin Procedures): HCPCS codes C5273, 15271, 15275, and 15277; or APC 5055 (Level 5 Skin Procedures): HCPCS code 15273. In CY 2025, the payment rate for APC 5053 (Level 3 Skin Procedures) is $612.13, the payment rate for APC 5054 (Level 4 Skin Procedures) is $1,829.23, and the payment rate for APC 5055 (Level 5 Skin Procedures) is $3,660.97. Table 27 lists the APC assignments and CY 2025 payment rates for the HCPCS codes describing the skin substitute application procedures. This information is also available in Addenda A and B of the CY 2025 final OPPS/ASC rule with comment period (the Addenda A and B are available on the CMS website https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices). [GRAPHIC] [TIFF OMITTED] TP16JY25.095 Beginning in CY 2016, we adopted a policy where we determine the high-cost/low-cost status for each skin substitute product based on either a product's geometric mean unit cost (MUC) exceeding the geometric MUC threshold or the product's per day cost (PDC), which is calculated as the total units of a skin substitute multiplied by the mean unit cost and divided by the total number of days, exceeding the PDC threshold. We assign each skin substitute that exceeds either the MUC threshold or the PDC threshold to the high-cost group. We assign any skin substitute with a MUC or a PDC that does not exceed either the MUC threshold or the PDC threshold to the low-cost group (87 FR 71976). We also assign skin substitutes with pass-through payment status to the high-cost category. We assign skin substitutes with some pricing information but without claims data for which to calculate a geometric MUC or PDC to either the high-cost or low-cost category based on the product's ASP plus 6 percent payment rate as compared to the MUC threshold. If ASP is not available, we use the wholesale acquisition cost (WAC) plus 3 percent to assign a product to either the high-cost or low-cost category. Finally, if neither ASP nor WAC is available, we use 95 percent of the average wholesale price (AWP) to assign a skin substitute to either the high-cost or low-cost category. In the CY 2021 OPPS/ASC final rule with comment period, after the first entirely synthetic skin substitute products were introduced into the market, we revised our description of skin substitutes to include both biological and synthetic products (85 FR 86064 through 86067). Any skin substitute product that is assigned to a code in the HCPCS A2XXX series is assigned to the high-cost skin substitute group, including new products without pricing information. New skin substitutes without pricing information that are not assigned a code in the HCPCS A2XXX series are assigned to the low-cost category until pricing information is available to compare to the MUC and PDC thresholds (89 FR 94247). In the CY 2014 OPPS/ASC final rule, we also noted that several skin substitute products are applied as either liquids or powders per milliliter or per milligram and are employed in procedures outside of CPT codes 15271 through 15278. We stated that these products ``. . . will be packaged into the surgical procedure in which they are used.'' (78 FR 74930 through 74931). We also clarified that our definition of skin substitutes does not include bandages or standard dressings, and that, under the OPPS, these items cannot be assigned to either the high-cost or low-cost skin substitute groups or be reported with either CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278 (85 FR 86066).

C. Current FDA Regulation of Products CMS Considers To Be Skin

Substitutes The FDA regulates products that CMS considers to be skin substitutes based on a variety of factors, including product composition, mode of action, and intended use. Relevant categories of FDA regulation for skin substitute products include the following:

1. Self-determination Under Section 361 of the PHS Act and the

Regulations in 21 CFR 1271 (361 HCT/Ps) Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/ Ps) are defined in 21 CFR 1271.3(d) as articles containing or consisting of human cells or tissues that are intended for implantation, transplantation, infusion, or transfer into a human recipient. Examples include bone, ligament, skin, dura mater, heart valve, cornea, hematopoietic stem/progenitor cells derived from peripheral and cord blood, manipulated autologous chondrocytes, epithelial cells on a synthetic matrix, and semen or other reproductive tissue. Pursuant to section 361 of the Public Health Service (PHS) Act, FDA promulgated regulations at 21 CFR [[Page 32515]] 1271, et seq that create an electronic registration and listing system for establishments that manufacture HCT/Ps, regulate donor eligibility, and establish current good tissue practice and other procedures to prevent the introduction, transmission, and spread of communicable diseases by HCT/Ps. A subset of HCT/Ps are those that are regulated solely under section 361 of the PHS Act and the regulations in 21 CFR 1271 (361 HCT/ Ps). The FDA has taken a risk-based, tiered approach in regulating HCT/ Ps; as the potential risk posed by a product increases, so too does the level of oversight (63 FR 26745). Although FDA is authorized to apply the requirements in the Federal Food, Drug, and Cosmetic Act (FD&C Act) and/or the PHS Act to those products that meet the definition of drug, biological product, or device, under a tiered, risk-based approach, HCT/Ps that meet specific criteria or fall within detailed exceptions do not require premarket review and approval. HCT/Ps that do not meet all the criteria in 21 CFR 1271.10(a) are not regulated solely under section 361 of the PHS Act and the regulations in 21 CFR part 1271. Unless an exception in 21 CFR 1271.15 applies, such products are regulated as drugs, devices, and/or biological products under the FD&C Act and/or the PHS Act and are subject to additional regulation, including applicable premarket review. An HCT/P is regulated solely under section 361 of the PHS Act and 21 CFR part 1271 if it meets all of the following criteria (21 CFR 1271.10(a)): The HCT/P is minimally manipulated. The HCT/P is intended for homologous use only, as reflected by the labeling, advertising, or other indications of the manufacturer's objective intent. The manufacture of the HCT/P does not involve the combination of the cells or tissues with another article, except for water, crystalloids, or a sterilizing, preserving, or storage agent, provided that the addition of water, crystalloids, or the sterilizing, preserving, or storage agent does not raise new clinical safety concerns with respect to the HCT/P. Either: ++ The HCT/P does not have a systemic effect and is not dependent upon the metabolic activity of living cells for its primary function; or ++ The HCT/P has a systemic effect or is dependent upon the metabolic activity of living cells for its primary function; and --- Is for autologous use; --- Is for allogeneic use in a first-degree or second-degree blood relative; or --- Is for reproductive use. Establishments that manufacture 361 HCT/Ps, as defined by 21 CFR 1271.3(e), must register and list their 361 HCT/Ps in the FDA's electronic Human Cell and Tissue Establishment Registration System (eHCTERS), but premarket review and approval by FDA is not needed. However, FDA acceptance of an establishment registration and 361 HCT/P listing form does not constitute a determination that an establishment is compliant with applicable FDA rules and regulations, that the FDA has agreed with the manufacturer's self-determination as a 361 HCT/P, or that the HCT/P is licensed or approved by FDA (21 CFR 1271.27(b)). When this proposed rule refers to 361 HCT/Ps, it generally refers to products where an establishment has self-determined that their product is a 361 HCT/P.\76\ If an HCT/P does not meet the criteria set out in 21 CFR 1271.10(a), and the establishment that manufactures the HCT/P does not qualify for any of the exceptions in 21 CFR 1271.15, the HCT/P will be regulated as a drug, device, and/or biological product under the FD&C Act, and/or section 351 of the PHS Act (42 U.S.C. 262), and applicable regulations, including 21 CFR part 1271, and premarket review generally is required. --------------------------------------------------------------------------- \76\ We note that establishments may seek feedback from FDA regarding their self-determination analysis and conclusion that a particular product is a 361 HCT/P. See, For example., https://www.fda.gov/vaccines-blood-biologics/tissue-tissue-products/tissue-reference-group. ---------------------------------------------------------------------------

2. 510(k) Premarket Notification Submissions, Premarket Approval

Applications, and De Novo Requests ``Devices,'' as defined under 21 U.S.C. 321(h)(1), do not achieve their primary intended purposes through chemical action and are not dependent upon being metabolized for the achievement of their primary intended purposes. Devices may be subject to premarket review through: (1) a 510(k) premarket notification submission (510(k)) in accordance with section 510(k) of the FD&C Act and implementing regulations in subpart E of 21 CFR part 807; (2) a premarket approval application (PMA) under section 515 of the FD&C Act and regulations in 21 CFR part 814; or, potentially, (3) a De Novo classification request (De Novo request) under section 513(f)(2) of the FD&C Act and regulations in subpart D of 21 CFR part 860. A 510(k) is a premarket submission made to the FDA to demonstrate that the device to be marketed is substantially equivalent to a legally marketed device that is not subject to premarket approval (sections 510(k) and 513(i) of the FD&C Act). Premarket approval is the most rigorous type of review and generally is required for class III medical devices. Class III devices are those devices for which insufficient information exists to determine that general controls and special controls would provide a reasonable assurance of safety and effectiveness and are purported or represented to be for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health, or present potential unreasonable risk of illness or injury (section 513(a)(1)(C) of the FD&C Act). De Novo classification is a marketing pathway for novel medical devices for which general controls alone (class I), or general and special controls (class II), provide reasonable assurance of safety and effectiveness, but for which there is no legally marketed predicate device. Devices that are classified into class I or class II through a De Novo request may be marketed and used as predicates for future premarket notification (that is, 510(k)) submissions, when applicable.

3. Biologics License Application

To lawfully introduce or deliver for introduction into interstate commerce a drug that is a biological product, a valid biologics license application (BLA) must be in effect under section 351(a)(1) of the PHS Act, 42 U.S.C. 262(a)(1), unless exempted under 42 U.S.C. 262(a)(3). Such licenses are issued only after showing that the product is safe, pure, and potent. Approval of a biologics license application or issuance of a biologics license shall constitute a determination that the establishment(s) and the product meet applicable requirements to ensure the continued safety, purity, and potency of such products (21 CFR 601.2(d)). Potency has long been interpreted to include effectiveness (21 CFR 600.3(s)). The definition of the term ``biological product'' in section 351(i) of the PHS Act is: ``a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein, or analogous product . . . applicable to the prevention, treatment, or cure of a disease or condition of human beings.'' (42 U.S.C. 262(i)). In contrast to the registration and listing requirements for a 361 HCT/P or the substantial equivalence requirements for 510(k)s, products licensed under section 351 of the PHS Act are required to meet stringent pre-and post-market requirements to ensure the products' safety and efficacy when [[Page 32516]] marketed. Table 2 lists several other notable differences between the relevant FDA regulatory categories for products CMS considers to be skin substitutes. [GRAPHIC] [TIFF OMITTED] TP16JY25.096

1. Separate Payment for Skin Substitute Products as Incident-To

Supplies --------------------------------------------------------------------------- \77\ No premarket authorization is required for 361 HCT/Ps. \78\ https://www.fda.gov/industry/fda-user-fee-programs/medical-device-user-fee-amendments-mdufa. \79\ These numbers include either a review within 180 days for decisions without advisory committee input or a review within 320 days for decisions with advisory committee input, respectively. \80\ PDUFA performance goals call for FDA to review and act on 90 percent of original BLA submissions within 10 months of the 60- day filing date. Other regulatory pathways may have different timelines. See https://www.fda.gov/patients/learn-about-drug-and-device-approvals/fast-track-breakthrough-therapy-accelerated-approval-priority-review; https://www.fda.gov/drugs/development-approval-process-drugs. \81\ https://www.fda.gov/industry/fda-user-fee-programs/prescription-drug-user-fee-amendments. --------------------------------------------------------------------------- We have carefully considered our policy objectives, which include: (1) ensuring a consistent payment approach for skin substitute products across the physician office and hospital outpatient department settings; (2) ensuring that appropriate HCPCS codes describe skin substitute products; (3) employing a uniform approach across products within the physician office setting, regardless of whether the product is synthetic or comprised of human- or animal-based material; and (4) providing clarity for interested parties on CMS skin substitutes policies and procedures. We propose, starting January 1, 2026, to separately pay for the provision of certain groups of skin substitute products as incident-to supplies when, for those products that are coverable under Medicare's rules, they are used during a covered application procedure paid under the PFS in the non-facility setting or under the OPPS. This proposal does not apply to biological products licensed under section 351 of the PHS Act, which will continue to be paid as biologicals under the ASP methodology in section 1847A of the Act. While we considered proposing to pay separately for skin substitutes initially under just the PFS in non-facility settings consistent with current practice, one of our primary policy objectives is to ensure a consistent payment approach for skin substitute products across the physician office and hospital outpatient department settings; and so, we ultimately determined that the suite of products referred to as skin substitutes should be treated in a uniform manner across different outpatient care settings, to the extent permitted by applicable law. The physician, in consultation with his or her patient, decides the site of service for treatment. While many factors are considered as a part of that decision, substantial differences in payment for the application of the same skin substitute product in one site of service versus another, or between similar skin substitute products, should not be one of them. Establishing a consistent framework for how these products are treated within the non-facility and hospital outpatient settings would empower providers to make the best treatment decisions for their patients, ensure equitable access to needed services, and pay appropriately for these services. We also considered bundling payment for skin substitute products in both the PFS and OPPS as part of this proposal. While supplies are generally bundled into the payment of the service in both the physician office and hospital outpatient departments, for many years skin substitute products have been paid separately in the physician office setting, where the majority of these products are currently applied. So, we have determined that bundling payment for skin substitute products with their administration procedures across both settings under this new proposal, before efforts are made to address improper utilization patterns, would be premature. Depending on whether our proposal is finalized, and the outcomes of a final policy, we may consider packaging skin substitute products with the related application procedures in both the hospital outpatient setting and non-facility setting in future rulemaking. We seek comments on our proposal to separately pay for the provision of certain groups of skin substitute products as well as on our proposal to implement this policy in both the non-facility and hospital outpatient settings. For additional details on the OPPS proposal for skin substitutes, please see the CY 2026 OPPS/ASC proposed rule with comment period; the remainder of this policy proposal will focus on implementation under the PFS. We propose, under the PFS, to pay separately for the use of specific skin substitute products (that is, skin substitute products that are not regulated as biological products under section 351 of the PHS Act) that are eligible for Medicare coverage during a covered application procedure in the non-facility setting as incident-to supplies in accordance with section 1861(s)(2)(A) of the Act. Supplies are a large category of items that typically are either for single use or have a shorter use life span than equipment. Supplies can be anything that is not equipment and include not only minor, inexpensive, or commodity-type items but also include a wide range of products used in outpatient settings, including certain implantable medical devices. ``Incident-to supplies'' refers to supplies that are furnished as an integral, although incidental, part of the physician's professional services in the course of diagnosis or treatment of an injury or illness (42 CFR 410.26). Because a skin substitute must be used to perform any of the procedures described by a CPT code in the range 15271 through 15278, and the procedure of treating the wound and applying a covering to the wound is the independent service, skin substitute products serve as a necessary supply for these surgical repair procedures. We seek comments on our proposal to separately pay for provision of skin substitutes as incident-to supplies under the PFS in the non-facility setting. Skin substitutes have historically been paid separately in the non- facility setting as biologicals instead of supplies when used during a covered application procedure. Products CMS considers to be skin substitutes may also meet FDA's [[Page 32517]] definition of a biological product, either directly or as an analogous product. However, section 1847A of the Act, which includes the controlling provisions for setting Medicare payment for drugs and biologicals billed by a physician, generally refers to biologicals in ways that do not encompass most skin substitutes. While most skin substitutes are either medical devices regulated under the FD&C Act or products regulated solely under section 361 of the PHS Act, subparagraphs (H) and (I) of section 1847A(c)(6) of the Act only refer to biologicals licensed under section 351 of the PHS Act. Section 1847A of the Act also references section 1927 of the Act, which again refers to section 351 of the PHS Act when referencing biologicals. In addition, to operationalize the payment system, section 1847A of the Act includes extensive references to National Drug Codes, a type of drug identifier published by the FDA and generally not assigned to skin substitutes, which further supports our proposal to stop utilizing 1847A payment methodologies for skin substitutes that are not licensed under section 351 of the PHS Act. For example, section 1847A(b)(4)(A) of the Act directs use of the lesser of the average sales price or wholesale acquisition cost when determining the payment amount for a single-source drug or biological for all National Drug Codes assigned to the drug or biological. The methodology for calculating both the average sales price and the wholesale acquisition cost is described in paragraph (6) of section 1847A(b) of the Act, which describes a process that again specifies the use of National Drug Codes. Because skin substitutes generally do not have National Drug Codes, CMS has operationalized this process for skin substitutes by allowing manufacturers of skin substitutes to self-select an Alternate ID to distinguish between different skin substitute products.\82\ However, the use of an alternative identification method is not required by the statute, and the calculation of a payment rate for these products is otherwise not possible. --------------------------------------------------------------------------- \82\ https://www.cms.gov/files/document/frequently-asked-questions-faqs-asp-data-collection.pdf. --------------------------------------------------------------------------- We note that section 351 and section 361 of the PHS Act are two distinct regulatory frameworks. Section 351 biological products must seek FDA pre-marketing approval (using clinical studies that are required by the applicable section 351 regulations) and are applicable to the prevention, treatment, or cure of a disease or condition. In contrast to the prerequisites for marketing products that fall under section 351 of the PHS Act , no FDA approval or clearance is required for marketing the self-determined 361 HCT/Ps. Section 361 products also do not receive an FDA license of approval for a specific prevention, treatment, or cure of a disease or condition and do not require controlled clinical trials to demonstrate effectiveness. Rather the self-determined 361 HCT/Ps are limited to intended uses that reflect homologous use for that particular product. In light of our careful review of the applicable statutory provisions governing skin substitute products paid under the ASP methodology under 1847A of the Act, the different FDA regulatory frameworks used for these products, and the skyrocketing increase in Medicare spending for such products, we are proposing to pay separately for specific skin substitute products (other than products licensed under section 351 of the PHS Act, which will continue to be paid as biologicals under the ASP methodology in section 1847A of the Act) that are eligible for Medicare coverage during a covered application procedure in the non-facility setting as incident-to supplies in accordance with section 1861(s)(2)(A) of the Act. One purpose of the new proposed policy is to limit some of the current profiteering practices occurring in this industry. For example, as reflected in CMS's ASP pricing files, we have observed a dramatic increase in launch prices. It is unclear how these prices could be attached to realistic changes in resource costs as many of these new products are minimally manipulated tissues. Our proposed policy is likely to disincentivize this practice, as well as several other novel industry practices that have come to our attention by preventing exploitation of skin substitute pricing under section 1847A of the Act, overuse of expensive skin substitute products, and waste resulting from use of more-expensive skin substitute products over clinically- appropriate, less-expensive alternatives. Notably, there has not been significant growth in payments for skin substitutes in the OPPS, which unconditionally packages the payment for skin substitute products with their associated application procedures. We note that the relevant statutory provisions, when considered together, do not require all of these kinds of products to be paid as biologicals under section 1847A of the Act. Therefore, under this proposed policy, unless a skin substitute is approved as a drug or as a biological product under section 351 of the PHS Act, in which case we would continue to pay for it consistent with section 1847A of the Act, we would consider it an incident-to supply for payment purposes under the PFS with the definitions and rates described below. For Medicare purposes, we propose to codify the definition of ``biological'' as ``a product licensed under section 351 of the Public Health Service Act'' at Sec. Sec. 414.802 and 414.902. We seek comments on our proposal to limit application of section 1847A of the Act to skin substitutes that are approved as a drug or as a biological product under section 351 of the PHS Act and our proposed edits to the regulations.

2. Payment Categories Based on FDA Regulatory Category

Paying separately for skin substitutes in the non-facility setting has led to dramatic price increases for these products, as noted above. Grouping similar products or services into a single billing code and using a single payment amount for them, as we do with many services under the OPPS, some services under the PFS, and all multiple-source drugs under section 1847A of the Act, incentivizes hospitals and prescribers to make the most cost-efficient, clinically effective treatment decision. However, we recognize that grouping dissimilar products and/or services to set payment rates can limit beneficiaries' access to appropriate care, especially when some groups encompass products and services with significant clinical and resource variability. In the case of skin substitutes, no single product among the wide range of products stands out as typical; so we have reviewed several methods to group or classify skin substitutes to determine which best reflects clinical and resource similarities between these products. To reflect relevant product characteristics, we propose to group skin substitutes that are not drugs or biologicals (that is, biological products licensed under section 351 of the PHS Act) using three CMS payment categories based on FDA regulatory categories (PMAs, 510(k)s, and 361 HCT/Ps) to set payment rates. We have previously noted in rulemaking that CMS has no obligation to categorize products based on the FDA's current regulatory framework (74 FR 60476); but, in this case, we have determined that the FDA regulatory categories provide an appropriate level of distinction for a heterogeneous category of products that exhibit clinical and resource variability that can ultimately improve the accuracy of the relative value units under the PFS. Proposing a payment policy that aligns with FDA's current regulatory framework also [[Page 32518]] provides for predictability and efficiency for purposes of Medicare payment. Payment for new products, as discussed below, could be achieved quickly and consistently by CMS's capacity to immediately recognize the FDA regulatory categories. a. 361 HCT/Ps As described previously, 361 HCT/Ps are a subset of HCT/Ps that are regulated solely under section 361 of the PHS Act and the regulations in 21 CFR 1271 and listed in the FDA's eHCTERS. Currently, registered 361 HCT/Ps generally are dressings intended only to cover and protect a wound. They are not intended to act on the wound to mediate, facilitate, or accelerate wound healing. Their activity is typically limited to that of a physical covering or wrap. A structural tissue intended for wound care is generally limited to the homologous use of cover and protect in order to be a 361 HCT/P.\83\ Intended uses such as wound treatment, promotion or acceleration of wound healing, or serving as a skin substitute would generally be non-homologous uses of structural tissues. Instead, products for such intended uses (for example, the treatment of wounds) generally are subject to PMA or BLA requirements. --------------------------------------------------------------------------- \83\ See Regulatory Considerations for HCT/Ps: Minimal Manipulation and Homologous Use, July 2020 (pg. 19). --------------------------------------------------------------------------- b. Devices Requiring 510(k) Clearance A 510(k) is a premarket submission made to the FDA generally by the manufacturer of a device to demonstrate that the device to be marketed is substantially equivalent to a legally marketed device that is not subject to premarket approval. (FD&C Act sections 510(k), 513(i)). Currently, 510(k)-cleared devices that we are considering for purposes of this proposal generally are dressings intended only to cover and protect a wound, to absorb exudate, and to maintain appropriate moisture balance within the wound. They are not intended to act on the wound to mediate, facilitate, or accelerate wound healing. Their activity is typically limited to that of a physical covering or wrap. When intended only to cover and protect a wound, to absorb exudate, and to maintain appropriate moisture balance within the wound and otherwise meeting the device definition, generally the FDA's Center for Devices and Radiological Health (CDRH) regulates wound dressings composed of natural biomaterials, including animal and human derived tissue as devices, and they are currently subject to 510(k) requirements. At this time, wound dressings have not been 510(k) cleared by FDA for indications such as wound treatment, promotion or acceleration of wound healing, or serving as a skin substitute.\84\ Instead, products for such intended uses generally are subject to PMA or BLA requirements. --------------------------------------------------------------------------- \84\ FDA Executive Summary Prepared for the October 26 & 27, 2022 Meeting of the General and Plastic Surgery Devices Panel of the Medical Devices Advisory Panel Classification of Wound Dressings with Animal-derived Materials (Section 3). Available at download --------------------------------------------------------------------------- For the purposes of this policy, we propose to group any skin substitutes authorized through the De Novo pathway with those cleared under 510(k)s. De Novo classification is a marketing pathway for medical devices for which general controls alone (class I), or general and special controls (class II), provide reasonable assurance of safety and effectiveness. While products authorized through the De Novo pathway have no legally marketed predicate device, devices that are classified into class I or class II through a De Novo authorization may be marketed and used as predicates for future premarket notification (that is, 510(k)) submissions, when applicable. Because of this, we would expect skin substitutes authorized through the De Novo pathway and those cleared under 510(k)s to be similar for purposes of this proposal. c. Products Subject to PMAs Premarket approval is the most rigorous type of review and generally is required for class III medical devices. Similar to BLA- approved wound care products, PMA-approved wound care products generally are intended to go beyond a simple wound cover to provide some type of direct treatment effect. The FDA has not defined the term ``skin substitute.'' However, the term has been used as a descriptor for certain wound care constructs that are currently approved under a BLA or PMA for treatment of burns or skin ulcers, including ulcers that appear to have failed to heal after standard of care. The intended uses of these products may include scaffold claims, reference to matrix attributes that promote endogenous cell binding, migration, differentiation, or proliferation, and/or activities mediated by matrix-associated regulatory factors that facilitate wound healing. Currently, wound care products intended to interact with the wound to facilitate, promote, or accelerate wound healing generally require approval of a BLA or, in some instances, a PMA. Approval of these products requires demonstration of safety and efficacy for the intended use, which generally requires the performance of clinical studies. So PMA-approved devices can be readily distinguished from 510(k)-cleared devices and 361 HCT/P products, which are intended mainly to cover and protect the wound. They are clinically different, provide different benefits, and would theoretically be used for patients presenting with different clinical scenarios. As discussed, PMA-approved devices also go through a much more rigorous review process before marketing as compared to the substantial equivalence requirements for 510(k)s and lack of premarket review for registered 361 HCT/Ps. This more rigorous review for PMAs, as well as differences in clinical utility, and the associated costs to manufacturers, suggests that the resources involved in furnishing these products could be distinct from 361 HCT/Ps and 510(k)s. We seek comment on our proposal to group skin substitutes into three FDA categories, PMA, 510(k), and 361 HCT/P, to set payment rates. d. Innovative Products We note that recognizing innovation for supplies through payment policy is complex. It may be difficult to differentiate a truly innovative product from another that offers no true clinical advance. We seek comments on how to properly recognize innovative products through payment policy under the PFS as we continue to assess how best to identify and value innovative products under the PFS. For example, we seek comments on whether skin substitutes with active pass-through payment status under the OPPS and/or those receiving new technology add-on payments (NTAP) under the IPPS should be paid separately from their FDA category under the PFS. We seek comments on whether these products should meet a substantial clinical improvement standard or whether, consistent with current pass-through policy, a device that has received marketing authorization for an indication covered by FDA's Breakthrough Devices Program would generally represent clinically- relevant innovation sufficient to qualify for a product-specific payment rate. Finally, we seek comments on using either a product's ASP or invoice pricing, similar to how devices with pass-through status are paid in ambulatory surgical centers, or adding a set percentage, similar to the NTAP add-on, to the applicable FDA category's base rate to set payment limits during the period of time that the product is covered by the pass-through and/or NTAP programs. [[Page 32519]]

3. Alternative Payment Categories

As a conceptually possible alternative to our proposal to group skin substitutes based on FDA regulatory categories for purposes of payment, we considered aligning these products based on their composition, for example, whether they are non-synthetic or synthetic. Two examples provided by interested parties include grouping the products as allografts (for example, amniotic products, cellular products), xenografts (for example, collagen products derived from animals), synthetics (for example, artificial products made from various biomaterials) and grouping the products as human living/ cryopreserved tissue, dehydrated human/amniotic tissue, animal xenografts, and synthetics/polymers. However, as noted previously, skin substitutes are a heterogenous group with an increasing intersection between tissue, bioengineered, and synthetic components. With many products now including both non-synthetic and synthetic components, clear categorization of skin substitutes by composition is no longer feasible. This makes this alternative extremely complex to implement because it would be necessary to determine which category would be most appropriate for each individual product based on the components of its composition and an assessment of the importance of each. In addition, it is unclear if grouping products based solely on their composition would provide accurate differentiation with respect to resource or clinical similarity for the purposes of setting an appropriate payment rate. Other alternatives we considered include grouping all products together to set a single payment rate or creating two or more categories reflecting product cost, similar to the grouping used currently to set payment rates for skin substitutes in hospital outpatient departments. While these options may offer certain operational advantages for their simplicity, neither recognizes the clinical differences among skin substitutes as reflected by their different intended uses. Paying for similar items and services at a comparable rate is a foundational aspect of our payment systems, but hospital outpatient departments and physicians and other practitioners paid under the PFS would instead have a financial incentive to use the least expensive skin substitute or the product offering the greatest discount, which could negatively affect patient outcomes and disincentivize innovation in this space if clinical differences are not recognized and differential payments rates are not set. In addition, dividing products by cost relies on pricing set by manufacturers. Especially in light of the dramatic growth of skin substitutes' ASP- based payment limits, this method is unlikely to accurately reflect skin substitute resource costs or clinical similarity. We seek comments on whether adding certain subcategories to the three proposed FDA categories would improve clinical or resource similarity. One potential example is creating certain subcategories for payment based on one or more FDA device product codes, which is a categorization process that FDA uses to group similar products together. Other examples that have come to our attention include setting unique payment rates for 361 HCT/Ps based on the number of tissue layers (for example, one layer, two layers, and three or more tissue layers) or entirely synthetic products versus non-synthetic products for 510(k)s. If significant clinical or resource differences were identified between products in one or more of these categories, CMS could create a separate payment grouping for these products for payment purposes. We also seek comments on whether products that are not in sheet form are appropriately considered skin substitutes for the purposes of providing separate payment under this policy. Examples include gel, powder, ointment, foam, liquid, or injected products listed in the nontraditional units of cc, mL, mg, and cm\3\. We request feedback on whether these products could be appropriately used as part of the CPT administration codes in the range 15271 through 15278, despite existing CPT coding guidelines limiting their use, and how these units could be paid using the FDA regulatory category groups. For example, assuming these products were appropriate to administer using the noted CPT administration codes or other administration codes, CMS could include products listed in units of cc, mL, or cm\3\ in the applicable FDA categories and equate a single cm\2\ unit to each cc, mL, or cm\3\ for payment purposes. We seek comments on whether other administration codes could be used to appropriately describe services performed using products with units other than cm\2\.

4. Establishing RVUs and Initial Payment Rates

Section 1848(c)(2)(N) of the Act provides authority to establish or adjust practice expense RVUs using cost, charge, or other data from suppliers or providers of services, including information collected or obtained under section 1848(c)(2)(M) of the Act. Section 1848(c)(2)(M) of the Act authorizes the Secretary to collect or obtain information on the resources directly or indirectly related to furnishing services for which payment is made under the PFS fee schedule, and such information may be collected or obtained from any eligible professional or any other source. In addition, it allows the Secretary, as he determines appropriate, to use such information in the determination of RVUs. We are relying on these authorities to propose to establish practice expense RVUs and initial payment rates for skin substitute products in each of the three FDA regulatory categories discussed above based on the volume-weighted average ASP, with no additional markup, as submitted by manufacturers, when available. We have developed initial payment rates for each group based on the weighted, per-unit average of ASPs for the fourth quarter of calendar year 2024. These initial payment rates are listed in the file titled ``Skin Substitute Products by FDA Regulatory Category'' on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. When ASP was not available, we used the MUC, which we currently use to determine the high-cost/low-cost status for each skin substitute product in the hospital outpatient setting, to calculate the proposed initial rates. While use of hospital cost data departs from the hierarchy of data sources contained in section 1847A of the Act to calculate prices for drugs and biologicals, we note that section 1848(c)(2)(N) of the Act provides authority for us to use this data to establish or adjust practice expense RVUs. In addition, as proposed, skin substitutes in the three FDA regulatory categories would no longer be considered biologicals for the purposes of payment under section 1847A of the Act. We considered using only the MUC data to calculate payment rates for these products. However, when ASP is reported, it may serve as a better estimate of cost across both settings as the ASP reflects sales to physicians as well as hospitals. We seek comments on our proposal to establish PE RVUs and initial payment rates for skin substitute products in each of the three FDA regulatory categories using ASP, or MUC when ASP is not available, using per-unit averaged pricing data from the fourth quarter of 2024. We also seek comments on whether these calculations, if finalized, should be updated with the most recently [[Page 32520]] available data at the time the final rule is drafted. As we are proposing to implement this policy for CY 2026 in a site- neutral manner across both the non-facility setting under the PFS and hospital outpatient setting under the OPPS, we are including all products used in either setting to calculate the rates. However, when product-specific utilization across both settings is used to calculate volume-weighted average payments, the result is an apparent rank order anomaly; despite having a more rigorous regulatory review process and receiving indications to treat and heal wounds, the PMA category has the lowest average payment. We are concerned that use of the novel pricing practices noted above has resulted in a decoupling of actual resource costs from the ASP. To address this, as a short-term measure, we propose to weight the product-specific utilization in calculating the proposed rates using the proportions from only the hospital OPPS data and establish for CY 2026 a single payment rate that would apply to all skin substitute products in the three FDA regulatory categories. We believe the OPPS utilization data may better predict utilization patterns under our proposed policies for non-facility settings because, similar to our proposals, these products are already grouped together for payment purposes under the OPPS. By grouping skin substitutes into high- and low-cost groups in the OPPS, hospitals are incentivized to choose either the lowest-cost, clinically appropriate product in the low-cost group or the lowest-cost, clinically appropriate product in the high-cost group. No similar incentive currently exists in the non- facility setting for physicians and other suppliers billing under the PFS. As the proposed policies are intended to mitigate the problematic incentives associated with current patterns of use in the non-facility setting by establishing payment rates for the products in groups instead of individually, we do not believe it would reflect the expected resource costs involved in providing care if we were to base the initial rates on utilization data from the non-facility setting that may be skewed by incentives that would no longer exist under our proposals. For these reasons, we are proposing to initially use hospital outpatient utilization to weight how much each product's price contributes to the proposed payment rates for skin substitutes cleared through the 510(k) pathway, self-determined to be 361 HCT/Ps, or approved under a PMA. We seek comments on the use of the hospital outpatient product utilization patterns to set payment rates for these products under the PFS. We are also proposing for CY 2026 to establish the same initial rate for each group of skin substitutes, including 510(k)-cleared products, registered 361 HCT/Ps, and approved PMAs. To ensure we are not underestimating the resources involved in using these products in furnishing care, we are proposing to use the highest of the calculated volume-weighted average payment amounts for 510(k)s, 361 HCT/Ps, and PMAs to set initial payment valuations. As the 361 HCT/Ps have the highest volume-weighted average payment amount, this average payment rate is reflected in the proposed initial payment rate below. However, we note that, in future notice and comment rulemaking, we intend to propose using claims data to set payment rates for products in these three categories, which would likely result in payment valuations that diverge based on the updated data. Another alternative is to set the payment rate for products in these categories at the volume-weighted average for all three categories, resulting in a lower initial payment rate for all three groups of products. We seek comment on our proposal to use the 361 HCT/P volume-weighted average payment amount to set the initial payment rates for products in all three categories as well as the alternative of using a pooled average of the three categories to set the initial payment rates. Alternatively, while the ASP pricing files show that skin substitutes across all three of the FDA regulatory categories have increased in cost substantially since 2019, unlike the self-determined 361 HCT/Ps and 510(k)-cleared devices, there has not been a substantial increase in the number of skin substitutes with approved PMAs. Consequently, it is possible that the non-facility utilization of the skin substitutes with approved PMAs is not as distorted as the utilization of the other kinds of skin substitutes. Setting a separate payment rate for this category using combined product utilization patterns (from both OPPS and non-facility settings), would result in a higher initial payment rate for the PMA category. This would rationally order the FDA regulatory categories, based on clinical considerations and some indicators of resource cost, until pricing data removed from these aberrant financial incentives can be incorporated. We seek comments on this alternative policy option. Under the PFS, payment rates are determined based on work RVUs, PE RVUs, and MP RVUs multiplied by their respective GPCI adjusters and then converted into dollars through multiplication by the conversion factor. For skin substitutes that would be valued and paid as incident- to supplies under our proposal, the practitioner work associated with the application of the skin substitute is already accounted for in the valuation of the application codes themselves (CPT codes 15271-15278), so we are not proposing work RVUs for the codes that describe the products involved in furnishing the application service. Rather than using the established PE methodology to derive PE RVUs from work, direct PE inputs, and the PE/HR data (as described in section II.E of this proposed rule), we are instead proposing to use our authority under sections 1848(c)(2)(M) and (N) of the Act to establish PE RVUs for these supplies using rates calculated from a combination of OPPS cost data and ASP data weighted by OPPS volume. For the specific PE RVUs, please see Addendum B of this proposed rule available on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. For malpractice RVUs, we generally believe that the malpractice resources are already reflected in the MP RVUs associated with the application codes, but because the standard PFS methodologies assign a minimum of .01 MP RVUs to all codes except add-on codes (75 FR 73276.), we are proposing an MP RVU of 0.01 for these supplies consistent with the rounding convention We also seek comments on whether we should consider treating the codes describing skin substitute products as add-on codes to the current CPT application codes. This would more clearly indicate that the only skin substitute products to be paid for and treated as supplies by Medicare are those used in conjunction with the already existing CPT administration codes. If we were to treat these codes as add-on codes to the application codes, we would effectuate this by assigning a global indicator of ZZZ to the skin substitute codes under the PFS. If we were to finalize these codes as add-on codes, we would assign 0 MP RVUs to them, consistent with existing policy regarding add-on codes. The proposed PE and MP RVUs would result in an initial payment rate of approximately $125.38/cm\2\ for skin substitute products in all three FDA regulatory categories (including PMA- [[Page 32521]] approved devices, 361 HCT/Ps, and 510(k) cleared devices) prior to the application of the geographic adjustments. Again, the proposed PE and MP RVUs are available in Addendum B of this proposed rule. We seek comments on these proposed initial values. We determined these proposed values using product pricing and volume for skin substitutes from paid claims with dates of service in the fourth quarter of 2024 because it is the most recent, substantially complete quarter of data. For professional claims, we excluded claims without a positive line-level allowed amount, so that we did not inadvertently include volume without presumed costs in the calculation. In addition, in reviewing the ASP pricing files from the first quarter of 2017 through the first quarter of 2025, the most complete ASP reporting is in the fourth quarter of each year. To determine the payment rates, we first used a product's ASP if it was available. If the ASP rate was missing, we used the 2024 MUC for the HCPCS code. We then calculated a single rate for each FDA category by taking the volume-weighted average of the rates for the applicable codes using the hospital outpatient utilization to weight each category. We note that if rather than using the final quarter of CY 2024, we alternatively, were to use pricing and volume from all four quarters of 2024 to determine proposed rates, the rate for all categories would be approximately $114.87/cm\2\. Using a pooled payment rate across all three categories would result in a rate of approximately $65.85/cm\2\, while splitting the categories to pay the PMA category using the combined product utilization patterns and the 510(k) and 361 HCT/P categories using the OPPS utilization patterns would result in rates of approximately $259.47/cm\2\ and $125.38/cm\2\ respectively. We seek comments on our proposed process to calculate initial payment rates as well as these alternatives. We propose to maintain the current structure of HCPCS codes for skin substitutes, including a process to introduce new product-specific codes and propose initial valuation based on the typical resource costs (that is, those reflected in ASP and MUC data) of the groups associated with each skin substitute's HCPCS code. For a complete list of codes and FDA categories, please see file titled ``Skin Substitute Products by FDA Regulatory Category'' available on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Individual HCPCS coding remains necessary to provide identification on claims and track each product's cost. This will also allow effectuation of any applicable coverage policies and improve our ability to determine if any refinements in payment categories would be appropriate in future rulemaking. For the most part, the resources for incident-to supplies are included in the total RVUs of a procedural code or are packaged under the OPPS. However, this proposed approach is not entirely novel, since Medicare pays for various components of services through the use of separate HCPCS codes and/or payment modifiers. The most obvious examples of these kinds of payment and coding splits occur in diagnostic tests and radiation treatment services, but there are also many examples in the PFS of add-on codes with RVUs primarily driven by the costs of particular items, including disposable supplies. In this case, the full range of resource costs for the services would not be included in the RVUs or payment amount for a single code but rather spread across several codes, namely a base code and one or more add-on codes. In this case, the application base codes would be reported with an add-on or multiple add-on HCPCS codes associated with skin substitutes. For example, CPT code 15271 (application of skin substitute graft, leg or ankle) would be reported with a PE-only add-on code that includes the resources involved in using the skin substitute product. (Such PE-only codes are designated with a PC/TC indicator of 3 and are only paid under the PFS in the non-facility setting. The same HCPCS code would be separately reportable in the hospital outpatient setting but not paid under the PFS.) We propose that new HCPCS codes describing skin substitutes would be categorized based on whether they are PMA-approved, 510(k)-cleared, or self-determined 361 HCT/Ps and the RVUs that apply to that category would be applied to the new code at the next quarterly update. Any change to the RVUs associated with each group would be subject to annual notice and comment rulemaking. Currently, HCPCS Level II coding applications are submitted and reviewed during the quarterly and biannual coding cycles. We post our coding determinations for drugs and biologicals on a quarterly basis, and do not routinely review those applications at a HCPCS public meeting. For non-drugs and non- biologicals, we post our coding decisions on a biannual basis. For our biannual cycles for non-drugs and non-biologicals, we post preliminary coding determinations then invite feedback on those preliminary coding determinations at a biannual HCPCS public meeting; final coding determinations are posted following the HCPCS public meeting. CMS has been reviewing skin substitutes marketed as 361 HCT/Ps in the quarterly drugs and biologicals coding cycle and 510(k)-cleared skin substitutes in the biannual, non-drugs and non-biologicals coding cycle. Beginning January 1, 2026, we propose to review HCPCS Level II coding applications for all skin substitutes marketed as 361 HCT/Ps through our biannual coding cycle for non-drugs and non-biological products, rather than on a quarterly basis. Skin substitutes that received a 510(k) clearance, PMA approval, or a granted De Novo request would continue to be evaluated in the biannual HCPCS Level II coding cycles. Therefore, under this proposal, CMS would evaluate all complete HCPCS Level II applications for skin substitutes in our biannual cycles. Should any products come to market under the BLA, NDA, or ANDA pathways that could potentially be considered skin substitutes, CMS would instead review them in a quarterly HCPCS Level II drugs and biologicals coding cycle. Before a code is assigned, not otherwise classified (NOC) codes would be used and the CMS MACs would assign the appropriate payment based on the product's FDA regulatory category. If skin substitutes that are not licensed under section 351 of the PHS Act are no longer paid as biologicals using the methodology under section 1847A of the Act, as proposed, then the manufacturers of these products would no longer be required to report ASP data to CMS under section 1847A(f)(2) of the Act. However, as noted above, when ASP data is reported, it may serve as a better estimate of resources across the hospital outpatient and non-facility settings than hospital outpatient MUC data. We propose to update the rates for the skin substitute categories annually through rulemaking using the most recently available calendar quarter of ASP data, when available, to set the rates. However, we have concerns that using a single, scheduled quarter of ASP data to set payment rates could encourage gaming. We seek comments on the use of a longer timeframe, such as the most recently available four calendar quarters, to set payment rates in future years. In the event ASP is not available for a particular product, we propose to use the MUC data. If MUC is not available, we propose to use the product's WAC or 89.6 percent of AWP [[Page 32522]] if WAC is also unavailable, similar to other products for which ASP is used to calculate a payment rate.\85\ Once updated use patterns reflecting this policy are available to calculate rates, we propose using all relevant products and the combined product utilization patterns (OPPS and non-facility) to determine a weighted average per- unit cost by category to set separate payment rates for each of the three categories. We seek comments on our proposed methodology to set and update the payment rates for skin substitutes as well as the rates themselves. --------------------------------------------------------------------------- \85\ 89.6 percent of AWP was calculated by first reducing the usual 95 percent of AWP price by 6 percent to generate a value that is similar to WAC with no percentage markup. ---------------------------------------------------------------------------

5. Summary

To implement this policy, we propose, starting January 1, 2026, to separately pay for skin substitute products as incident-to supplies in both the non-facility and hospital outpatient settings. We propose to create three groups to pay for skin substitutes based on their FDA regulatory categories: PMA, 510(k), and 361 HCT/P, and would include each skin substitute in the applicable category based on its FDA approval, clearance, or self-determination, unless a skin substitute is licensed under section 351 of the PHS Act, as described earlier in this section, in which case the payment methodology under section 1847A would continue to apply. We propose calculate initial payment rates for skin substitute products in each of the three FDA regulatory categories using the volume-weighted average ASP for skin substitute products in each group as submitted by manufacturers, when available, and the MUC when ASP is not available. We propose to use the hospital outpatient utilization patterns to set the payment rates for all three categories of skin substitutes, which we propose to pay at a single rate for CY 2026. For CY 2026, the proposed PE and MP RVUs would result in an initial payment rate of approximately $125.38/cm\2\ (prior to the application of the geographic adjustments) for PMA approvals, 510(k)s, and self-determined 361 HCT/Ps. We propose to accomplish this by maintaining the current HCPCS codes for skin substitutes and then applying this rate to each code. We propose to update the rates for the skin substitute categories annually through rulemaking using the most recently available calendar quarter of ASP data, when available, to set the rates, though we are seeking comments on whether a single quarter is most advisable. In the event ASP is not available for a particular product, we propose to use the hospital outpatient MUC data. If MUC is not available, we propose to use the product's WAC or 89.6 percent of AWP if WAC is also unavailable. We propose to include all skin substitute products used across both settings as well as the combined product utilization patterns, as soon as data is available that reflects the results of this policy, to determine a weighted average per-unit cost by group to set the payment rates for each of the three categories. We are also seeking comments on how to best integrate this data into updated PE RVUs for years subsequent to CY 2026. Specifically, we are seeking comment on whether we should apply PE scaling factors to the data (that is, volume-weighted ASP or MUC) in order to optimize relativity with other PFS services and supplies once these products are incorporated into PFS data used for rate setting. We propose to evaluate all complete HCPCS Level II applications for skin substitutes in our biannual cycles. Finally, we propose to codify the definition of ``biological'' as ``a product licensed under section 351 of the Public Health Service Act'' at Sec. Sec. 414.802 and 414.902.

1. Background

CMS establishes valuation and payment for approximately several thousand physician services as ``global surgical packages'' (herein `globals') under the PFS. Each package includes a surgical procedure defined by the HCPCS code as well as related services, for example, pre and immediate post-operative care on the day of the procedure, care related to complications, and discharge services, and post-operative evaluation and management (E/M) services typically provided during postoperative periods of specified lengths called ``global periods.'' Currently, CMS pays for approximately 5,500 globals covering 0-, 10- and 90-day postoperative periods. Of the 5,500 total global surgical procedures, approximately 4,200 have either a 10- or 90-day global periods and nearly all of these 4,200 globals have at least one post- operative E/M visit included as part of their respective global surgical packages. Global surgical packages apply to the practitioner performing the procedure and, in the case of group practices, to the entire practice. Practitioners outside of those performing the procedure (or in the same group practice) can separately bill for post- operative and other care related to a global surgical procedure. Taking into consideration findings from OIG reports that practitioners were performing fewer post-operative visits than Medicare assumed when valuing globals as well as our internal analysis, we finalized a policy in the CY 2015 PFS final rule to transition all globals with 10-day and 90-day global periods to have 0-day global periods. This change would allow practitioners to bill separately for any post-operative visits (or other care related to the procedure, for example, care for complications) furnished after the day of the procedure to be billed as standalone services. However, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10), prohibited CMS from implementing this finalized policy and required that we collect data on the number and level of post-operative visits provided to enrollees as part of global periods and use this information to improve the valuation of globals. In response to the MACRA requirements, CMS developed a claims-based reporting system and required practitioners in nine states and in practices of 10 or more National Provider Identifiers (NPIs) to report post-operative visits falling with global periods using no-pay HCPCS code 99024. We also initiated a research contract with RAND to analyze the collected data, to conduct a survey-based study on the level of post-operative visits, and to model different approaches to use the collected data and other information to improve the accuracy of valuation for global surgical services (see 81 FR 80212 through 80222 for more detailed discussion). We recognize that, in some cases, a practitioner may only furnish the procedure component of a global surgical package, while in others, a practitioner may only provide post-operative care. In these cases, we rely on a set of transfer of care modifiers to split the fixed overall valuation of global surgical packages between providers. CMS broadened the scope for required reporting of transfer of care modifier -54 (Surgical care only) in the CY 2025 PFS Final Rule as part of an iterative process to improve global package valuation and therefore payment. Previously, this modifier could only be attached to global procedures with a 10 or 90-day global period when a patient's transfer of care was formally documented by both the surgeon and one or more post-operative care practitioners. In internal analyses, CMS found modifier -54 was used only rarely in aggregate and was concentrated in a small number of [[Page 32523]] ophthalmologic and cardiology procedures. Beginning January 1, 2025, and onward, modifier -54 must be reported in all cases where the surgeon does not intend to provide post-operative care, including but not limited to cases where both the surgeon and another practitioner both formally document the transfer of care as under the previous policy (see 89 FR 97961 through 97967 for that discussion). For CY 2025, we also finalized a new add-on code, HCPCS code G0559, for post-operative care services furnished by a practitioner other than the one who performed the surgical procedure (or another practitioner in the same group practice). This add-on code will more appropriately reflect the time and resources involved in these post-operative follow- up visits by practitioners who were not involved in furnishing the surgical procedure however may see the patient for postoperative care (see 89 FR 97968 through 97971 for that discussion).

2. Strategies To Address Global Package Valuation

We noted in the CY 2025 PFS final rule that our proposal to broaden the required use of the transfer of care modifiers was a first step in an iterative process towards improving the accuracy of global surgical service valuation and payment. We are considering next steps to improve the valuation and payment for these services. We are continuing to consider approaches to establishing the payment allocations for portions of the global package when the transfer of care modifiers are used. Furthermore, we are considering approaches to specifically use information reported to CMS on the number and level of post operative visits to improve global surgical service valuation as required by Section 1848(c)(8)(C) of the Act. We requested comments in the CY 2025 proposed rule on how best to determine the appropriate shares used to split total global surgical package valuations into discrete portions for the purposes of determining valuation (and therefore payment) in transfer of care scenarios. We sought comment on potential approaches to revise these shares and how they could better reflect current medical practice and conventions for post-operative follow-up care. We sought to identify a procedure-specific, data-driven method for assigning shares to portions of the global package valuation to more appropriately align the resources involved in each portion to payment rates. We stated in the CY 2025 PFS proposed rule that we would appreciate and carefully consider recommendations from interested parties, including the AMA RUC, on what those shares should be and other relevant information. We also stated in the proposed rule that CMS could use data collected over nearly a decade on the observed number of post-operative visits furnished to patients as part of global surgical packages as the basis for calculating new data-driven shares. We note that we received few comments in response to our comment solicitation. Currently, Medicare pays surgeons a fixed share of a global procedure's valuation when billed with specified modifiers, specifically, modifier -54. These ``procedure shares'' are based on long-standing assumption and are clustered at certain values, for example, 79 percent, 80 percent, or 81 percent for roughly half of procedures with 90-day global periods and 90 percent for most procedures with 10-day global periods (the remaining approximately 20 percent and 10 percent for 90-day and 10-day procedures, respectively, account for post-operative care). We believe that the use of these distinct portions of the global package will help us to best align valuation--and therefore payment--to the practitioner who is performing a specific portion of the global surgical service. We heard from commenters that the current component percentages published in the PFS were developed using magnitude estimation and cross-specialty scaling and that there is not any reverse engineering of work and time that can be performed to develop a better percentage of pre-, intra- and post-operative work than what is currently published in the PFS. Given the fact that both PFS global surgical procedures and relative valuations have changed since the inception of the PFS, we believe there may be better ways to provide the correct apportionments to the global surgical packages. Furthermore, clinical practice including post-operative care has changed dramatically over the decades since the inception of the current shares. We did not update procedure shares in the CY 2025 PFS final rule. We are again soliciting public comments on strategies to improve the accuracy of payment for global surgical packages, specifically related to the procedure shares. We are seeking public comments on what the procedure shares should be based on for the 90-day global packages. We are also seeking comments and stakeholder input as to current practice standards and division of work between surgeons and providers of post-operative care. Currently, there is no clear basis for the current procedure shares, and this will allow for stakeholder input as to what those procedure shares should be. In accordance with MACRA, we have been collecting data on post- operative visits furnished as part of global surgical packages and the extent to which these furnished post-operative visits align with the number of post-operative visits assumed by CMS when valuing global surgical services. For procedures with 90-day global periods and 2023 dates of service, our internal analysis shows that only 28 percent of post-operative visits considered by CMS during global surgical service valuation were actually provided to enrollees as part of global surgical packages. Our internal findings and RAND's published analyses have consistently shown that only a fraction of ``expected'' post- operative visits are provided. Absent evidence to the contrary, which CMS has not identified despite several solicitations for comments from the public (89 FR 97961 through 97962), our interpretation is that many post-operative visits considered during the valuation of global surgical packages are not provided as part of these packages. This presents an opportunity to use information from claims-based reporting of post-operative visits to develop procedure shares that better reflect current practice patterns. Using this data, as established through notice and comment rulemaking (81 FR 80212 through 80222), we considered several options regarding how the procedure shares could be updated, based on the data that was analyzed. These options are available in the file titled ``Estimated Procedure Shares Under Procedure-Only Modifier -54, Surgical Services with 90-day Global Period'' on the CMS website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. As we continue to contemplate how to pay more accurately for global surgical packages, and specifically in consideration of how the procedure shares could be updated, we identified three alternatives to the status quo assumed procedure shares (that is, the share of a global surgical package valuation assigned to the surgeon when modifier -54 is reported) for global surgical packages. Each alternative uses information available in claims data to calculate new HCPCS code- specific procedure shares. Each alternative also calculates procedure shares as the ratio of procedure work RVUs (defined as the sum of intraservice work and other work on the day of the procedure (that is, pre-service work) as indicated on the [[Page 32524]] Physician Time File to total global surgical package work RVUs. The Physician Time File and Addendum B are both located under the Download files for this proposed rule at: https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices. The approaches differ in the way we would calculate procedure work RVUs, and more specifically, intraservice work as a component of procedure work RVUs. Under the first approach, we would calculate procedure work RVUs by subtracting work RVUs assigned to each post-operative visit listed in the Physician Time File for a global procedure HCPCS code from the total valuation of the global surgical package. Under the second approach, we would calculate procedures' work RVUs by subtracting the work RVUs for post-operative visits provided as part of global surgical packages. To do so, we would multiply the number of post-operative visits typically provided for the global procedure HCPCS code (defined as the median count of post-operative visits reported to CMS using no- pay code 99024 among procedures without overlapping global periods with other global surgical services) by the average valuation per post- operative visit calculated for the mix (that is, number and level) of post-operative visits for the global procedure HCPCS code as listed in the Physician Time File. Under the third approach, would calculate procedure RVUs as the product of total physician time (in minutes) for each global procedure HCPCS code from the Physician Time File and the ratio of physician time (in minutes) assigned to post-operative visits for the code in the Physician Time File to total physician time. In the CY 2025 PFS final rule, we expanded the scope for modifier - 54 (surgical care only) to include all scenarios where the surgeon does not expect to provide post-operative care. The scope for modifier -55 (post-operative care only) was not changed. As a result, the post- operative share of total global surgical package valuation can only be billed with modifier -55 when transfers of care are formally documented by the surgeon and another practitioner. Looking at 2023 claims data, RAND's analyses suggest the current procedure shares do not reflect the real-world division of work between surgeons and providers of post-operative care. Across all CY 2023 90- day global procedures and weighted by procedure volume, the procedure share under our current assumed procedure shares would have been 82 percent, on average, assuming all procedures were billed with modifier -54. Under the procedure shares calculated based on the actual number of visits furnished in global surgical periods (determined using information from claims-based reporting of post-operative visits), the average procedure share would have been 91 percent, with 85 percent of procedures having higher procedure shares under this approach compared to CMS' current assumptions. We are seeking comments on the best approach to utilize going forward, specifically on the CPT code 99024-based approach. Of these approaches, the first (in terms of work RVUs) and third (in terms of physician time minutes) rely on Physician Time File counts of the number and level of post-operative visits assumed to occur as part of global surgical packages. Based on prior analyses (see 89 FR 97961), these counts are substantially inflated. Of all Physician Time File assumed visits and for 2023 global surgical procedure volumes, only 2 percent of visits following procedures with 10-day global periods and 28 percent of visits following procedures with 90-day global periods were provided to patients as part of global surgical packages. For this reason, we believe the resulting procedure shares under these approaches are too low and would lead to payments to surgeons that do not reflect the time and resources involved in furnishing the procedure component of global surgical services. In contrast, the second approach (using post-operative visit counts from claims-based reporting) reflects real-world, observed patterns of post-operative care. Furthermore, the second approach allows for routine, transparent updating of procedure shares over time. In contrast, shares could be updated under the first and third approaches only when global surgical services are revalued, and even then, with the limitation noted previously that the resulting visit counts by E/M service level are often substantially too high. We are seeking comments on replacing the current procedure shares using the second approach described above (that is, with procedure work RVUs calculated using counts of post-operative visits reported using no-pay CPT code 99024). Additionally, in our internal review of the percentages assigned for the pre-operative, surgical care, and post-operative portions of the global packages, we found that there are a small number of codes that do not have any assigned percentages in our files even though these codes are identified as global packages. We are again seeking comments on whether we should consider, first, whether these codes are appropriately categorized as 90-day global package codes, and if so, we are seeking comments on what the assigned percentages should be for each portion of the service.

1. Overview

Section 1848(c) of the Act requires that each service paid under the PFS be composed of three components: work, practice expense (PE), and malpractice (MP) expense. As required by section 1848(c)(2)(C)(iii) of the Act, beginning in CY 2000, MP RVUs are resource-based. Section 1848(c)(2)(B)(i) of the Act also requires that we review, and if necessary, adjust RVUs no less often than every 5 years. 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. We consider the following factors when we determine MP RVUs for individual PFS services: (1) specialty-level risk values derived from data on specialty-specific MP premiums incurred by practitioners; (2) service-level risk values derived from Medicare claims data of the weighted average risk values of the specialties that furnish each service; and (3) an intensity/complexity of service adjustment to the service-level risk value based on either the higher of the work RVU or clinical labor portion of the direct PE RVU. In the CY 2016 PFS final rule with comment period (80 FR 70906 through 70910), we discussed this methodology and finalized a policy to begin conducting annual MP RVU updates to [[Page 32525]] 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. 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. Section 1848(e)(1)(C) of the Act requires us to review, and if necessary, adjust the GPCIs at least every 3 years. In the CY 2020 PFS final rule (84 FR 62606 through 62615), we implemented the fourth review and update of MP RVUs, and we also conducted the statutorily required 3-year review of the GPCIs. The MP premium data used to update the MP GPCIs are the same data used to determine the specialty-level risk factors, which are used in the calculation of MP RVUs. Therefore, to increase efficiency, we finalized a policy to align the update of MP premium data and specialty-level risk factors with the update to the MP GPCIs. We finalized a policy to review, and if necessary, update the MP RVUs at least every 3 years, similar to our review and update of the GPCIs. In the CY 2023 PFS final rule, we conducted the statutorily required review of the MP RVUs and GPCIs (87 FR 69634 through 69641). We refer to this review and update of the MP RVUs as the ``CY 2023 update.'' As part of this review, we finalized a methodological improvement to move from MP risk factors to a MP risk index. The risk index is calculated as a ratio of the specialty's national average premium to the volume-weighted national average premium across all specialties. We finalized this methodological improvement to increase consistency with the calculation of MP RVUs, so that changes in the MP risk index reflect changes in payment, as opposed to changes relative only to the specialty with the lowest national average premium.

2. Methodology for the Proposed Revision of Resource-Based Malpractice

(MP) RVUs a. General Discussion We calculated the MP RVUs that we are proposing for CY 2026 using updated MP premium data obtained from state insurance rate filings. The methodology used to calculate the CY 2026 resource-based MP RVUs largely parallels the process used in the CY 2023 update with continued improvements to our data collection process. To calculate the MP RVUs, we obtain information on specialty-specific MP premiums that are linked to specific services, and using this information, we derive relative risk values for the various specialties that furnish a particular service. Because MP premiums vary by state and specialty, we weigh the MP premium data geographically and by specialty. We calculated the MP RVUs we are proposing using four data sources: data on MP insurance premium rates presumed to be in effect as of December 31, 2023; CY 2023 Medicare payment and utilization data; higher of the CY 2025 final work RVUs or the clinical labor portion of the direct PE RVUs; and CY 2025 GPCIs. We used the higher of the CY 2025 final work RVUs or clinical labor portion of the direct PE RVUs in our calculation to develop the CY 2026 proposed MP RVUs while maintaining overall PFS budget neutrality. Similar to the CY 2023 update, we calculated the proposed MP RVUs using specialty[dash]specific MP premium data because they represent the expense incurred by practitioners to obtain MP insurance as reported by insurers. For CY 2026, we obtained the most current MP insurance premium data available, reflecting rates with a presumed effective date of no later than December 31, 2023, from insurers with the largest market share in each state. We identified insurers with the largest market share using the National Association of Insurance Commissioners (NAIC) 2023 market share report. This annual report provides state-level market share for entities that provide premium liability insurance (PLI) in a state. Premium data was 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 was 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, we used the 2023 market share report to select insurance companies. These market share filings were the most current data available during the data collection and acquisition process. MP insurance premium data was collected from all 50 States and the District of Columbia. We made efforts to collect filings from Puerto Rico; however, no recent filings were submitted at the time of data collection, and therefore, we used filings from the previous update. Consistent with the CY 2023 MP RVU update, we did not collect filings for the other U.S. territories: American Samoa, Guam, Virgin Islands, or Northern Mariana Islands. We collected MP insurance premium data 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. We made adjustments 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. In the CY 2020 PFS final rule (84 FR 62607 through 62610), we finalized methodological improvements that expanded the specialties and amount of filings data used to develop the proposed risk factors, which are used to develop the proposed MP RVUs. 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. [[Page 32526]] b. Proposed Methodological Refinements For the CY 2026 update, we are not proposing any major methodological refinements to the development of MP premium data. However, we have continued to refine the universe of specialties subject to imputation and sources of imputation for each specialty. For the CY 2023 update, premium data for the specialties of Geriatric Medicine, Hospitalist, Internal Medicine, Medical Oncology, Pain Management, and Preventive Medicine were augmented with some imputed data, but sufficient data was collected for these specialties during this CY 2026 update such that imputation was unnecessary. Additionally, Allergy/Immunology was previously used as the imputation source for both Osteopathic Manipulative Medicine and Addiction Medicine. For this CY 2026 update, more clinically similar specialties were used as the imputation source for these specialties. c. Steps for Calculating Proposed 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 methodological improvements established in the CY 2023 PFS final rule (87 FR 69634 through 69641). The specialty[dash]weighted approach bases the MP RVUs for a given service on a weighted average of the risk index of all specialties furnishing the service. This approach ensures that all specialties furnishing a given service are reflected in the calculation of the MP RVUs. The steps for calculating the proposed MP RVUs are described below. Step (1): Compute a preliminary national average premium for each specialty. Insurance rating area MP premiums for each specialty are mapped to the county level. The specialty premium for each county is then multiplied by its share of the total U.S. population (from the U.S. Census Bureau's 2018 to 2022 American Community Survey (ACS) 5-year estimates). This contrasts with 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 2025 GPCIs) would not be counted twice. Without the geographic variation adjustment, the cost differences among fee schedule areas would be reflected once under the methodology used to calculate the MP RVUs and again when computing the service specific payment amount for a given fee schedule area. Step (2): Determine which premium service risk groups to use within each specialty. Some specialties had premium rates that differed for surgery, surgery with obstetrics, and non-surgery. These premium classes are designed to reflect differences in risk of professional liability and the cost of MP claims if they occur. To account for the presence of different classes in the MP premium data and the task of mapping these premiums to procedures, we calculated a distinct risk index for surgical, surgical with obstetrics, and nonsurgical procedures where applicable. However, the availability of data by surgery and non- surgery varied across specialties. Historically, no single approach accurately addressed the variability in premium class among specialties, and we previously employed several methods for calculating average premiums by specialty. Developing Distinct Service Risk Groups: We determined that there was sufficient data for surgery and non-surgery premiums, as well as sufficient differences in rates between classes for 17 specialties. These specialties are listed in Table 29. The CY 2026 update uses the same structure of specialty/service risk group as the CY 2023 update. For all other specialties (those that are not listed in Table 29) that typically do not distinguish premiums as described above, a single risk index value was calculated, and that specialty risk index value was applied to all services performed by those specialties. [GRAPHIC] [TIFF OMITTED] TP16JY25.097 Step (3): Calculate a risk index for each specialty. The relative differences in national average premiums between specialties are expressed in our methodology as a specialty-level risk index. These risk index values are calculated by dividing the national average premium for each specialty by the volume-weighted national average premium across all specialties. Risk index values less than one correspond to specialties with relatively lower malpractice risk than average, and values greater than one correspond to specialties with relatively higher malpractice risk. The volume-weighted national average premium was calculated as the sum of the product of the national average premium and total CY 2023 PE and work RVUs for each specialty/service risk group, then dividing by total CY 2023 PE and work RVUs across all specialties. (a) Technical Component (TC) Only Services For the CY 2020 update of the MP RVUs (84 FR 62606 through 62615), we finalized that we would assign a risk factor of 1.00, which was the lowest physician specialty risk factor (allergy/immunology), to TC-only services due to a lack of sufficient professional liability premium data. For the proposed CY 2023 update of the MP RVUs (87 FR 46016), our expanded data [[Page 32527]] collection efforts resulted in sufficient premium data such that we could directly assign a risk value for TC- only services without the need for mapping. However, due to a technical error, we continued to assign a 1.0 risk factor for all TC-only services which resulted in an incorrect calculation of the proposed MP RVUs for TC-only services. In the CY 2023 PFS final rule (87 FR 69641), we finalized a correction to this ratesetting error for the 2023 update of the MP RVUs that again mapped TC-only services to allergy/immunology, which had a risk index value of 0.430. We stated that using this risk value will correct the identified error, while also maintaining as much stability as possible for TC-only services so that there is not a major shift in value from current MP RVUs for the technical and professional components. For this CY 2026 update of the MP RVUs, we are proposing to map TC- only services to the specialty allergy/immunology, which now has a risk index value of 0.427. Mapping the TC-only services to the specialty allergy/immunology would be consistent with the CY 2020 and 2023 updates of the MP RVUs and maintain stability in our ratesetting process. We request comments regarding the risk index value for TC-only services. Table 30 shows the risk index values by specialty type and service risk group. BILLING CODE 4120-01-P [[Page 32528]] [GRAPHIC] [TIFF OMITTED] TP16JY25.098 [[Page 32529]] [GRAPHIC] [TIFF OMITTED] TP16JY25.099 [[Page 32530]] [GRAPHIC] [TIFF OMITTED] TP16JY25.100 BILLING CODE 4120-01-C Step (4): Calculate MP RVUs for each CPT/HCPCS code. Resource-based MP RVUs were calculated for each CPT/HCPCS code that has work or PE RVUs. The first step was to identify the percentage of services furnished by each specialty for each respective CPT/HCPCS code. This percentage was then multiplied by each respective specialty's risk index value as calculated in Step 3. The products for all specialties for the CPT/HCPCS code were then added together, yielding a specialty[dash]weighted service specific risk index reflecting the weighted MP costs across all specialties furnishing that procedure. The service specific risk index was multiplied by the greater of the work RVU or clinical labor portion of the direct PE RVU for that service, to reflect differences in the complexity and risk-of- service between services. For low volume services codes, we finalized in the CY 2018 PFS final rule (82 FR 53000 through 53006) a proposal 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 2026, we are soliciting public comment on the list of expected specialties. The proposed list of codes and expected specialties is available on our website under downloads for the CY 2026 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Step (5): Rescale for budget neutrality. The statute requires that changes to fee schedule RVUs must be budget neutral. Thus, the last step is to adjust for relativity by rescaling the proposed MP RVUs so that the total proposed resource- based MP RVUs are equal to the total current resource-based MP RVUs scaled by the ratio of the pools of the proposed and current MP and work RVUs. This scaling is necessary to maintain the work RVUs for individual services from year to year while also maintaining the overall relationship among work, PE, and MP RVUs. Specialties Excluded from Ratesetting Calculation: In section II.B. of this proposed rule, Determination of Practice Expense Relative Value Units, we discuss specialties that are excluded from ratesetting for the purposes of calculating PE RVUs. We are proposing to treat those excluded specialties in a consistent manner for the purposes of calculating MP RVUs. We note that all specialties are included for purposes of calculating the final BN adjustment. The list of specialties excluded from the ratesetting calculation for the purpose of calculating the PE RVUs that we propose 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 2026 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 currently 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 proposed rule, the Regulatory Impact Analysis. Additional information on our methodology for updating the MP RVUs is available in the ``Interim Report for the CY 2026 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 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.

1. Background

Section 1848(e)(1)(A) of the Act requires us to develop separate [[Page 32531]] 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[dash]quarter of the relative cost differences compared to the national average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI floor for services furnished in Alaska beginning January 1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE GPCI floor for services furnished in Frontier States (as defined in section 1848(e)(1)(I) of the Act) beginning January 1, 2011. Additionally, section 1848(e)(1)(E) of the Act provides for a 1.0 floor for the work GPCIs, which has been extended by many successive amendments to the statute. The 1.0 floor for the work GPCI under section 1848(e)(1)(E) of the Act was most recently extended by section 2206 of the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119-4, enacted March 15, 2025) through September 30, 2025 (that is, for services furnished no later than September 30, 2025). Therefore, as proposed, the CY 2026 work GPCIs and summarized GAFs do not reflect the 1.0 work floor. Additionally, as required by sections 1848(e)(1)(G) and (I) of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for Frontier States are permanent, and therefore, are reflected in the CY 2026 proposed GPCIs. Section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last previous GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be \1/2\ of the adjustment that otherwise would be made. Therefore, since more than 1 year has passed since the previous GPCI update was implemented in CY 2023 and 2024, we are proposing to phase in \1/2\ of the proposed GPCI adjustment in CY 2026 and the remaining \1/2\ of the adjustment for CY 2027. We have completed our review of the GPCIs and are proposing new GPCIs beginning for CY 2026 in this proposed rule. We also calculate a geographic adjustment factor (GAF) for each PFS locality. The GAFs are a weighted composite of each PFS locality's proposed work, PE, and MP GPCIs using the share of total RVUs that each component accounts for in the actual Medicare utilization from CY 2023. While we do not actually use GAFs in computing the PFS payment for a specific service, they are a useful metric for purposes of comparing overall costs and payments across fee schedule areas. The actual effect of GPCIs on payment for any actual service would deviate from the GAF to the extent that the proportions of work, PE and MP RVUs for the service differ from those reflected in the GAF. See Addenda D and E to this proposed rule for the CY 2026 proposed GPCIs and summarized GAFs. These Addenda are available on the CMS website under the supporting documents section of the CY 2026 PFS proposed 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. Subsequently, we operationalized a technical refinement to retire several California localities that were no longer operationally necessary, resulting in a reduction of unique California localities from 32 to 29 from CY 2024 on. We refer readers to the discussion of this technical refinement in the CY 2023 (87 FR 69621 through 69625) and 2024 (88 FR 78985 through 78987) PFS final rules, and the section below. As a result, the current 109 payment localities include 34 Statewide areas (that is, only one locality for the entire State) and 72 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 109 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 109 fee schedule areas, also referred to as payment localities, are defined alternatively by State boundaries (Statewide areas for example, Wisconsin), metropolitan areas (for example, Metropolitan St. Louis, MO), portions of a metropolitan area (for example, Manhattan), or rest-of-state areas that exclude metropolitan areas (for example, Rest of Missouri). This locality configuration is used to calculate the GPCIs that are in turn used to calculate geographically adjusted payments for physicians' services under the PFS. As stated in the CY 2011 PFS final rule with comment period (75 FR 73261), changes to the PFS locality structure would generally result in changes that are budget neutral within a State. For many years, before making any locality changes, we have sought consensus from among the professionals whose payments would be affected. We refer readers to the CY 2014 PFS final rule with comment period (78 FR 74384 through 74386) for further discussion regarding additional information about locality configuration considerations.

3. GPCI 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). The changes to the proposed CY 2026 GPCIs for each locality reflect the updated resource cost data in each area to better adjust PFS payments for geographic cost differences compared to national average costs. We note that the changes in the proposed GPCIs reflect [[Page 32532]] the statutory floors and limitations on variation discussed above that may advantage some rural localities. We describe the data sources and methodologies we use to calculate each of the three GPCIs below in this section. Additional information on the CY 2026 GPCI update is available in an interim report, ``Interim Report for the CY 2026 Update of GPCIs and MP RVUs for the Medicare PFS,'' on our website located under the supporting documents section for the CY 2026 PFS proposed 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 nine 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 Employment and Wage Statistics (OEWS), formerly known as Occupational Employee Statistics (OES), wage data as a replacement for the 2000 Census data. The BLS OEWS 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 OEWS 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 OEWS 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 OEWS data (2009 through 2011) as a replacement for the 2006 through 2008 data to compute the work GPCIs; for the CY 2017 GPCI update, we used updated BLS OEWS data (2011 through 2014) as a replacement for the 2009 through 2011 data to compute the work GPCIs; for the CY 2020 GPCI update, we used updated BLS OEWS data (2014 through 2017) as a replacement for the 2011 through 2014 data to compute the work GPCIs; and for the CY 2023 GPCI update, we used updated BLS OEWS data (2017 through 2020) as a replacement for the 2014 through 2017 data to compute the work GPCIs. Because of its reliability, public availability, level of detail, and national scope, we believe the BLS OEWS 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 2026 GPCI update, we used updated BLS OEWS data (2020 through 2023) as a replacement for the 2017 through 2020 data to compute the proposed 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 2023), we used 2017 through 2020 BLS OEWS 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 OEWS is the most appropriate data source for collecting wage and employment data. Therefore, in calculating the CY 2026 GPCI update, we used updated BLS OEWS data (2020 through 2023) as a replacement for the 2017 through 2020 data for purposes of calculating the employee wage component and purchased service index component of the PE GPCI. In calculating the CY 2026 GPCI update for the office rent index component of the PE GPCI, we used the 2018 through 2022 American Community Survey (ACS) 5-year estimates as a replacement for the 2015 through 2019 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). To ensure that premium data are homogenous and comparable across geographic areas, data were collected for policies with uniform coverage limits of $1 million per occurrence and $3 million aggregate ($1 million/$3 million). The MP GPCIs are calculated based on insurer rate filings of premium data for $1 million/$3 million mature claims- made policies (policies for claims made rather than losses occurring during the policy term). For the CY 2023 GPCI update, we used [[Page 32533]] premium data presumed in effect as of December 31, 2020. The CY 2026 MP GPCI update reflects premium data presumed in effect no later than December 31, 2023. We note that we finalized a few technical refinements to the MP GPCI methodology in CY 2017 and refer readers to the CY 2017 (81 FR 80270) PFS final rule for additional discussion of those. d. GPCI Cost Share Weights For the CY 2026 GPCIs, we are proposing to continue to use the current 2006-based MEI cost share weights for determining the proposed PE GPCI values. Specifically, we use the cost share weights to weight the four components of the PE GPCI: employee compensation, office rent, purchased services, and medical equipment, supplies, and other miscellaneous expenses, as shown in Table 31. 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, CY 2020, and CY 2023 GPCI updates. We note that we proposed and finalized to rebase and revise the MEI cost share weights for CY 2023, and we refer readers to the detailed discussion in section II.M. of the CY 2023 PFS final rule (87 FR 69688 through 69710). Due to the concurrent rebasing and revision of the MEI cost share weights during the CY 2023 GPCI update, we proposed and finalized to maintain the use of the 2006-based MEI cost share weights for the CY 2023 GPCIs, thus delaying the implementation of the rebased and revised 2017-based MEI cost share weights for this purpose. We refer readers to our discussion about using the rebased and revised MEI cost share weights for purposes of proportioning the work, PE, and MP RVU pools in PFS ratesetting and for the purposes of updating the GPCIs in the CY 2023 PFS final rule (87 FR 69414 through 69415, 69619 through 69620, and 70212 through 70218). In those sections, we discussed our considerations for updating the MEI cost share weights for the RVUs and the GPCIs and the potential redistributive impact that making such a change would have had on PFS payments. We have historically updated the GPCI cost share weights to make them consistent with the most recent update to the MEI, which was most recently done for CY 2023; however, in light of the overall impacts of making this change and in the interest of maintaining stability in payments, we proposed and finalized to maintain the use of the currently used 2006-based MEI cost share weights for the CY 2023 final PE GPCIs. For the CY 2026 GPCI update, we have the same concerns about the potential redistributive effects that implementing the 2017-based MEI would have on PFS payments. Additionally, we have received data from the American Medical Association's (AMA) Physician Practice Information \86\ (PPI) and Clinician Practice Information \87\ (CPI) Surveys, however, these data lack the specific breakdown of practice expense that we would need to consider its use to weight the four components of the PE GPCI for CY 2026, including Office Rent and Purchased Services, which are reported in an aggregate buckets of general overhead costs and other expenses in the survey data. We refer readers to section VII. of this proposed rule for more discussion regarding a possible derivation of cost share weights for use in the PE GPCI from the PPI and CPI Survey. --------------------------------------------------------------------------- \86\ https://www.ama-assn.org/system/files/table-1-results-from-ppi.pdf. \87\ https://www.ama-assn.org/system/files/table-1-results-from-cpi-final.pdf. --------------------------------------------------------------------------- We also note that maintaining the 2006-based MEI cost share weights for the CY 2026 GPCI update preserves consistency in the data used to update both the GPCI and PFS ratesetting inputs for CY 2026. We refer readers to section VII. of this proposed rule for additional discussion on this issue and the estimated impacts as it relates to PFS ratesetting and the GPCI update for CY 2026. We also refer readers to the discussion regarding the PPI and CPI survey data in section II.B. of this proposed rule. In addition, we direct readers to the CY 2011 PFS final rule (75 FR 73256) where we similarly delayed implementation of updated MEI cost share weights in response to commenters' concerns about our separate, ongoing analysis that would inform future GPCI changes and the reallocation of labor-related costs from the medical equipment and supplies and miscellaneous component to the employee compensation component of the PE GPCI. In the CY 2011 PFS final rule (75 FR 73256), we acknowledged that we typically update the GPCI cost share weights concurrently with the most recent MEI rebasing and revision, but in consideration of the commenters' concerns in response to the proposed rule, we did not use the revised cost share weights for the CY 2011 GPCIs and instead finalized the implementation of the rebased and revised MEI cost share weights through subsequent rulemaking. We invite comments on the 2017- based MEI cost share weights and the weights based on PPI and CPI Survey data for purposes of alternatives considered for the CY 2026 GPCIs and PFS ratesetting, given the estimated impacts discussed in section VII. of this proposed rule. We are also soliciting comments on how best to proceed with implementation of the 2017-based MEI cost share weights or PPI and CPI Survey weights in the future. More specifically, we are seeking comment on how best to incorporate updated cost share weights into the PE GPCI if we were to implement them outside the statutorily required triennial update in which we phase in all aspects of the GPCI update through the previously discussed 2-year (\1/2\ in each year) phase-in required by section 1848(e)(1)(C) of the Act. Section 1848(e)(1)(C) of the Act requires that, if more than one year has elapsed since the date of the last GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be \1/2\ of the adjustment that otherwise would be made. Therefore, specifically, we are seeking comment on potentially incorporating the updated cost share weights into the CY 2027 GPCIs. We note that we would not be required by statute to phase in the adjustment over 2 years as specified in section 1848(e)(1)(C) of the Act because, in CY 2027, no more than one year would have elapsed since this CY 2026 GPCI adjustment. Therefore, we are also seeking comment on whether it would be appropriate to use a multi-year transition to incorporate updated cost share weights for purposes of the PE GPCI and PFS ratesetting as we have done in the past when incorporating other new data into the PFS payment methodology (for example, the clinical labor update), or if, because updated cost share weights only impact the composition of the PE GPCI, such a transition would not be warranted. If we were to instead apply updated cost share weights for purposes of the PE GPCI and PFS ratesetting for CY 2028 or later, we would be required under section 1848(e)(1)(C) of the Act to phase in the GPCI adjustments over 2 years. We are seeking comments on whether, in that case, it would be appropriate to similarly apply a transition to implement updated cost share weights for purposes of PFS ratesetting as well, and refer readers to section II.B and VII. of this proposed rule for more discussion regarding the alternatives considered and impacts of a phase-in of updated cost share weights in PFS ratesetting. The proposed CY 2026 GPCI cost share weights are displayed in [[Page 32534]] Table 31. We note that the 2017-based MEI cost share weights as finalized in section II.M. of the CY 2023 PFS (87 FR 69688 through 69708) final rule are also displayed in Table 31 for awareness regarding potential future rulemaking and GPCI updates. As previously discussed, the PPI and CPI Survey data lack the specific breakdown of practice expense that we would need to consider its use to weight the four components of the PE GPCI for CY 2026, therefore, we refer readers to section VII. of this proposed rule for more discussion regarding a possible derivation of cost share weights for use in the PE GPCI from the PPI and CPI Survey for awareness regarding potential future rulemaking and GPCI updates. [GRAPHIC] [TIFF OMITTED] TP16JY25.101 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 2026 PFS proposed rule. The qualifying states are: Montana; Wyoming; North Dakota; South Dakota; and Nevada. In accordance with statute, we will apply a 1.0 PE GPCI floor for these states in CY 2026. 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 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 fee schedule areas from 9 under the current locality structure to 27 under the MSA-based locality structure; although for the purposes of payment, the actual number of fee schedule areas under the MSA-based locality structure is 32. We refer readers to the CY 2017 PFS final rule (81 FR 80267) for a detailed discussion of this operational decision. Section 1848(e)(6)(D) of the Act defined transition areas as the counties in fee schedule areas for 2013 that were in the rest-of-state locality, and locality 3, which was comprised of Marin County, Napa County, and Solano County. Section 1848(e)(6)(B) of the Act specified that the GPCI values used for payment in a transition area are to be phased in over 6 years, from 2017 through 2022, using a weighted sum of the GPCIs calculated under the new MSA-based locality structure and the GPCIs calculated under the PFS locality structure that was in place prior to CY 2017. That is, the GPCI values applicable for these areas during this transition period were a blend of what the GPCI values would have been for California under the locality structure that was in place prior to CY 2017, and what the GPCI values would be for California under the MSA-based locality structure. For example, in CY 2020, which represented the fourth year of the transition period, the applicable GPCI values for counties that were previously [[Page 32535]] in the rest-of-state locality or locality 3 and are now in MSAs were a blend of \2/3\ of the GPCI value calculated for the year under the MSA- based locality structure, and \1/3\ of the GPCI value calculated for the year under the locality structure that was in place prior to CY 2017. The proportions continued to shift by \1/6\ in each subsequent year so that, by CY 2021, the applicable GPCI values for counties within transition areas were a blend of \5/6\ of the GPCI value for the year under the MSA-based locality structure, and \1/6\ of the GPCI value for the year under the locality structure that was in place prior to CY 2017. Beginning in CY 2022, the applicable GPCI values for counties in transition areas were the values calculated solely under the new MSA-based locality structure; therefore, the phase-in for transition areas is complete. Additionally, section 1848(e)(6)(C) of the Act establishes a hold harmless requirement for transition areas beginning with CY 2017; whereby, the applicable GPCI values for a year under the new MSA-based locality structure may not be less than what they would have been for the year under the locality structure that was in place prior to CY 2017. There are 58 counties in California, 50 of which were in transition areas as defined in section 1848(e)(6)(D) of the Act. The eight counties that were not within transition areas are: Orange; Los Angeles; Alameda; Contra Costa; San Francisco; San Mateo; Santa Clara; and Ventura counties. We note that while the phase-in for transition areas is no longer applicable, the hold harmless requirement is not time-limited, and therefore, is still in effect. For the purposes of calculating budget neutrality and consistent with the PFS budget neutrality requirements as specified under section 1848(c)(2)(B)(ii)(II) of the Act, we finalized the policy to start by calculating the national GPCIs as if the fee schedule areas that were in place prior to CY 2017 are still applicable nationwide; then, for the purposes of payment in California, we override the GPCI values with the values that are applicable for California consistent with the requirements of section 1848(e)(6) of the Act. This approach to applying the hold harmless requirement is consistent with the implementation of the GPCI floor provisions that have previously been implemented--that is, as an after-the-fact adjustment that is made for purposes of payment after both the GPCIs and PFS budget neutrality have already been calculated. Additionally, section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be \1/2\ of the adjustment that otherwise would be made. For a comprehensive discussion of this provision, transition areas, and operational considerations, we refer readers to the CY 2017 PFS final rule (81 FR 80265 through 80268). In the CY 2020 final rule (84 FR 62622), a commenter indicated that some of the distinct fee schedule areas that were used during the period between CY 2017 and CY 2018 are no longer necessary. Specifically, with regard to the Los Angeles-Long Beach-Anaheim MSA, which contains 2 counties (across two former unique locality numbers, 18 and 26) that are not transition areas, we acknowledge that we only needed more than one unique locality number for that MSA for payment purposes in CY 2017, which was the first year of the implementation of the MSA-based payment locality structure. Neither of the counties in the Los Angeles-Long Beach-Anaheim MSA (Orange County and Los Angeles County) are transition areas under section 1848(e)(6)(D) of the Act. Therefore, the counties were not subject to the aforementioned GPCI value incremental phase-in (which is no longer applicable) or the hold- harmless provision at section 1848(e)(6)(C) of the Act. Similarly, the San Francisco-Oakland-Berkeley MSA contains four counties--San Francisco, San Mateo, Alameda, and Contra Costa counties--across three former unique locality numbers, 05, 06, and 07. These counties are not transition areas and will receive the same GPCI values, for payment purposes, going forward. In response to the comment, we acknowledged that we did not propose any changes to the number of fee schedule areas in California, but would consider the feasibility of a technical refinement to consolidate into fewer unique locality numbers; and if we determined that consolidation was operationally feasible, we would propose the technical refinement in future rulemaking. In light of the foregoing, for CY 2023, we proposed and finalized to identify the Los Angeles-Long Beach-Anaheim MSA, containing Orange County and Los Angeles County, by one unique locality number, 18, as opposed to two, thus retiring locality number 26, as it is no longer needed. Similarly, we proposed and finalized to identify the San Francisco-Oakland- Berkeley MSA containing San Francisco, San Mateo, Alameda, and Contra Costa counties by one unique locality number, 05, as opposed to four, thus retiring locality numbers 06 and 07, as they are no longer needed. Additionally, we noted that we would modify the MSA names as follows: the San Francisco-Oakland-Berkeley (San Francisco Cnty) locality (locality 05) would become San Francisco-Oakland-Berkeley (San Francisco/San Mateo/Alameda/Contra Costa Cnty), and Los Angeles-Long Beach-Anaheim (Los Angeles Cnty) locality (locality 18) would become Los Angeles-Long Beach-Anaheim (Los Angeles/Orange Cnty). The refinement finalized in the CY 2024 PFS final rule (88 FR 78985 through 78987) ultimately changed the number of distinct fee schedule areas for payment purposes in California from 32 to 29. We noted that because Marin County is in a transition area and subject to the hold harmless provision at section 1848(e)(6)(C) of the Act, we needed to retain a unique locality number for San Francisco-Oakland-Berkeley (Marin Cnty), locality 52. We note that these changes do not have any payment implications under the PFS. h. Alternatives Considered Related to List of Occupation Codes Used in the Work GPCI Calculation As explained in the Work GPCIs section above, we utilize a refined list of occupation groups and codes from the Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) data to calculate the work GPCI. Because of its reliability, public availability, level of detail, and national scope, we believe the BLS OEWS data continue to be the most appropriate source of wage and employment data for use in calculating the work GPCIs. For the CY 2023 GPCI update, we reviewed the occupation codes and groups used to capture geographic variation in professional wages to assess other potential codes and groups that could be used in addition to the current selections to calculate the work GPCI, with significant consideration given to the extent to which the data exist in the file (data existence) and how well the occupation codes are represented in the data (data sufficiency). Based on our review and commenters' response to the proposals, we finalized the addition of two new occupation groups (and their corresponding occupation codes), Management Occupations and Business and Financial Operation Occupations, to the preexisting seven occupation groups, and four new occupation codes to the pre-existing Computer, Mathematical, Life, and Physical Science group, and three occupation codes to the pre-existing Social Science, [[Page 32536]] Community and Social Service, and Legal group in the CY 2023 PFS final rule (87 FR 69621 through 69625). The practical effect of the addition of these occupation groups and codes on the work GPCI was minimal because the statute at section 1848(e)(1)(A)(iii) of the Act requires that the work GPCI reflect only one quarter of cost differences, but their inclusion added meaningful data regarding the geographic variation in professional wages for CY 2023. In the CY 2023 PFS final rule (87 FR 69631), some commenters stated that our methodologic changes to the work GPCI occupation groups and codes create unnecessary complexity and limited transparency. The commenters stated that CMS did not provide an impact analysis or criteria for inclusion (that is, how well it correlated as a proxy) other than significant consideration to the extent to which the data exist in the file (data existence) and how well the occupation codes are represented in the data (data sufficiency). The commenters stated that, without further explanation, two additional occupation groups were added to the previous seven occupation groups, which increased the greater than 100 current occupation codes by 60. One commenter believed that it is unlikely that the cumulation of so many professions will accurately reflect the relative difference in work of a single profession such as a physician; the commenter stated that, if one were to compare the BLS OEWS data file used for the work GPCI with that of the healthcare provider dataset, there is a discordance. The commenters agreed that the healthcare provider dataset should not be used for developing the work GPCI due to circularity, but believe it could be used to validate the proposed work GPCIs and to identify a much smaller subset of professions that would act as more reliable proxies than what was proposed. The commenters urged CMS to apply a smaller number of professions to the work GPCI, as they thought that doing so would result in a more reliable and accurate proxy for physician work, and provide more information about the correlation between physician work and the proxy professions to allow the public to verify its accuracy. In response to commenters, we noted that we do not claim the proxy professions themselves, or the absolute wages of the proxy professionals are correlated to physician wages, but rather, that the geographic variation in proxy professional wages is similar to the geographic variation in physician wages. We believed that there would be similar geographic variation if one were to compare the BLS OEWS data used for the work GPCI with data from a healthcare provider dataset. 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. Further, we welcomed opportunities to discuss data sources that can be used to validate the work GPCI, similar to the analysis that we performed for residential and commercial rent data used for the office rent index for CY 2023. For CY 2026, we analyzed the potential effect of using a consolidated set of occupation codes on the work GPCI and compared that effect to changes in work GPCI values that would occur utilizing the standard set of occupation codes, as finalized for CY 2023. We acknowledge that the use of a more parsimonious set of occupations could be an improvement if it results in essentially the same work GPCI values with increased simplicity and clarity for interested parties. We explored approaches to condense the list of occupation codes used in a more systematic manner, with the establishment of inclusion criteria for an occupation code such as level of education attainment and data completeness. For our analysis, we identified 274, 157 and 90 occupation codes with at least 50 percent, 75 percent, and 90 percent having a Bachelor's Degree or higher, excluding occupation codes in Group 29 that are paid on the Fee Schedule, respectively from the May 2023 OEWS data. We then applied various data completeness criteria thresholds to these occupation codes with wage data for at least 50 percent, 75 percent, and 90 percent of U.S. counties, resulting in the number of occupation codes displayed below in Table 32. [GRAPHIC] [TIFF OMITTED] TP16JY25.102 Of these scenarios with various thresholds of the education attainment and data completeness inclusion criterion, we investigated two scenarios compared to the standard CY 2026 GPCI: (1) occupation codes with at least 75 percent of Bachelor's Degree or Higher excluding Group 29 and wage data for at least 50 percent of U.S. counties, resulting in a list of 57 occupation codes and (2) occupation codes with at least 75 percent of Bachelor's Degree or Higher excluding Group 29 and wage data for at least 75 percent of U.S. counties, resulting in a [[Page 32537]] list of 31 occupation codes from the May 2023 OWES data. Under these two scenarios, the work GPCIs result in changes relative to current CY 2025 work GPCI values that are nearly identical to those under the standard CY 2026 GPCI update, as shown below in Table 33. [GRAPHIC] [TIFF OMITTED] TP16JY25.103 Based on the two scenarios' changes relative to current CY 2025 work GPCI values that are nearly identical to those under the standard CY 2026 GPCI update, we are seeking comment on the potential to establish clear inclusion criteria for occupation codes for the calculation of the work GPCI in future GPCI updates. We note that a smaller, standardized list of occupation codes that meet rigorous and clearly established thresholds for education attainment and data completeness would aid transparency in the work GPCI and be responsive to the commenters' requests. Similar to the finalized addition of occupation groups and codes for the CY 2023 GPCI update, the practical effect of limiting the occupation groups and codes on the work GPCI would be minimal because the statute at section 1848(e)(1)(A)(iii) of the Act requires that the work GPCI reflect only one quarter of cost differences, but the limitation could aid transparency and allow for a greater degree of precision when tracking changes in geographic variation in professional wages across GPCI update years. i. Proposed GPCI Update Summary As explained in the Background section above, section 1848(e)(1)(C) of the Act mandates the periodic review and adjustment of GPCIs. For each periodic review and adjustment, we publish the proposed GPCIs in the PFS proposed rule to provide an opportunity for public notice and comment and allow us to consider whether any revisions in response to comments are warranted prior to implementation. The proposed CY 2026 updated GPCIs that we propose for the first and second year of the 2- year phase-in, along with the GAFs, are displayed in Addenda D and E to this proposed rule available on our website under the supporting documents section of the CY 2026 PFS proposed rule web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. We note that in recent GPCI updates, commenters have stated that there is a lack of transparency into the GPCI data and methodology used to derive the GPCIs. In response to the CY 2023 PFS proposed rule, one commenter stated that they cannot accurately validate CMS' GPCI calculations because there is little transparency and access to the data and methods used. The commenter stated that they submitted a comment on the CY 2022 PFS proposed rule urging CMS to provide more transparency into the GPCI calculations in general, including a more detailed description of the step-by-step methodology and the specific data files used to derive the GPCIs. In addition to making the RVUs by county available, the commenters also suggested CMS to make available the source data for the work GPCI by county, the source data for each component of the practice expense GPCI, and all budget neutrality adjustments and calculations. The commenters stated that CMS provided these data prior to 2020 and that they used it to reproduce and validate the CMS methodology for calculating the GPCIs each year. In the CY 2023 PFS final rule, in response to these comments, we referred readers to the step-by-step instructions provided in the final report, ``Final Report for the CY 2023 Update of GPCIs and MP RVUs for the Medicare PFS,'' on our website located under the supporting documents section for the CY 2023 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. We also referred readers to Table 4.A.1: Summary of Elements Required for GPCI Calculation in the final report, and the previous discussion, for the data sources used for the work GPCI and each component of the practice expense GPCI. As noted in the proposed and final rules for each GPCI update, we discuss the years and timeframes of data used from each source. We note that we provide web links to the publicly-available data sources used in the GPCI updates, the methodological parameters, as well as an overview of how we develop each GPCI component in the interim and final reports published with [[Page 32538]] each proposed and final rule containing a GPCI update. This practice is consistent with previous updates. We also note that the budget neutrality adjustment and statutory floors applied after the budget neutrality adjustment are detailed in the note, ``CY 2023 GPCI Update Note_County_Data,'' on our website located under the supporting documents section for the CY 2023 PFS proposed and final rules at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. We also reminded commenters that, in response to the commenters' concerns expressed in rulemaking for the CY 2020 GPCI update, we included more detailed steps in the final report, ``Final Report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare Phys Fee Sched_v19Feb2020'', which is available on the CMS website under the downloads section of the CY 2020 PFS final rule to assist interested parties in navigating these data. Additionally, as part of our ongoing commitment to transparency, we post the county- level data that we use to develop the proposed GPCIs, which allows interested parties to further examine and replicate our GPCI methodology. This file is also available on the CMS website on our website under the Downloads section, titled ``CY 2023 Proposed Rule GPCI County-Level Data File.'' We believe that we sufficiently addressed previous commenters' concerns for the CY 2023 GPCI update in the proposed and final rules and aforementioned CY 2020 and CY 2023 interim and final reports, but we are seeking comment related to any additional information specific to what data was provided prior to 2020 that is no longer provided. Based on a comparison of data and information in the interim and final reports, as well as the data file downloads, we have not identified any information or data that we have discontinued since 2020, as commenters have claimed. We are open to any feedback related to specific information and data that would aid transparency in a GPCI update. III. Other Provisions of the Proposed Rule

1. Requiring Manufacturers of Certain Single-Dose Container or Single-

Use Package Drugs To Provide Refunds With Respect To Discarded Amounts (Sec. Sec. 414.902 and 414.940) a. Background Section 90004 of the Infrastructure Investment and Jobs Act (Pub.

L. 117-58, November 15, 2021) (hereinafter referred to as ``the

Infrastructure Act'') amended section 1847A of the Act to add a provision requiring manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug (hereinafter referred to as ``refundable drug'') for calendar quarters beginning January 1, 2023. The calculation of the refund is codified at Sec. 414.940(c). For a new refund quarter (as defined at Sec. 414.902) beginning on or after January 1, 2023, an amount equal to the estimated amount (if any) by which: The product of the total number of units of the billing and payment code for such drug that were discarded during such new refund quarter; and the amount of payment determined for such drug or biological under section 1847A(b)(1)(B) or (C) of the Act, as applicable, for such new refund quarter; Exceeds an amount equal to the applicable percentage of the estimated total allowed charges for such drug for the new refund quarter. Section 1847A(h)(3)(B)(ii) of the Act provides that, in the case of a refundable drug that has unique circumstances involving similar loss of product as that described in section 1847A(h)(8)(B)(ii) of the Act, the Secretary may increase the applicable percentage otherwise applicable as determined appropriate by the Secretary. In the CY 2023 PFS final rule, we adopted an increased applicable percentage of 35 percent for drugs reconstituted with a hydrogel and with variable dosing based on patient-specific characteristics (87 FR 69731). In the CY 2024 PFS final rule (88 FR 79047 through 79064), we finalized an increased applicable percentage for two categories of drugs with unique circumstances, codified at Sec. 414.940(d). These categories include: certain drugs with a low-volume dose (that is, where the volume removed from the vial or container containing the labeled dose does not exceed 0.1 mL or falls between 0.11 mL and 0.4 mL); and orphan drugs furnished to fewer than 100 unique beneficiaries. Drugs with an increased applicable percentage are listed on the CMS website.\88\ --------------------------------------------------------------------------- \88\ https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs. --------------------------------------------------------------------------- b. Application for Increased Applicable Percentage Section 1847A(h)(3)(B)(ii) of the Act permits the Secretary to increase the applicable percentage for a refundable drug that has unique circumstances through notice and comment rulemaking. In the CY 2024 PFS final rule (88 FR 79057 through 79060), we finalized an application process (CMS-10835, OMB 0938-1435) by which manufacturers could apply for an increased applicable percentage for a drug and may request that we consider an individual drug to have unique circumstances for which an increased applicable percentage is appropriate. We explained that manufacturers could benefit from a formal process through which they can provide information, including that which may not be publicly available, in order to request an increase in their refundable drug's applicable percentage and provide justification for why the drug has unique circumstances for which such an increase is appropriate, including in the case of a drug with an applicable percentage that has already been increased by virtue of its unique circumstances.89 90 We finalized the application deadline of February 1 of each year, adopted a deadline of August 1 for the FDA-approval of the drug and the deadline for notifying and submitting the FDA-approved label to CMS of September 1 of the year before the year in which the increased applicable percentages would apply. We codified this process in regulation at Sec. 414.940(e). The application process requires the applicant to provide a written request comprising FDA-approved labeling for the drug; justification for the consideration of an increased applicable percentage based on such unique circumstances; and justification for the requested increase in the applicable percentage. Following a review of timely applications, CMS will summarize its analyses of applications and propose appropriate increases in rulemaking. If adopted, the increased applicable percentage will be the applicable percentage beginning as of the following January 1. The collection of information requests associated with the application process (CMS-10835, OMB 0938-1435) would remain unchanged under this proposed rule. --------------------------------------------------------------------------- \89\ https://www.cms.gov/files/document/drugs-increased-applicable-percentage.pdf. \90\ https://cms.gov/files/document/orphan-drugs-increased-applicable-percentage-calendar-quarters-2023.pdf. --------------------------------------------------------------------------- We received two applications for increased applicable percentage for consideration in the CY 2026 PFS proposed rule. Both applicants submitted the information required under Sec. 414.940(e)(1), including, as applicable, the FDA-approved labeling for the drug, justification for consideration for increased applicable [[Page 32539]] percentage, and justification for the requested applicable percentage. The first application for increased applicable percentage for CY 2026 is from the manufacturer of Leukine[supreg] (sargramostim),\91\ who has resubmitted a request for a 72 percent applicable percentage after applying in the previous year. Leukine[supreg] is a leukocyte growth factor with five FDA-approved indications in hematological malignancies and one indication for post-radiation exposure to increase white blood cell counts. The applicant's submitted FDA-approved labeling for the drug did not include the adjuvant uses described in the application (further described below in this paragraph) due to ongoing cancer vaccine adjuvant trials. The applicant reemphasizes that multiple sponsors are in late-stage development, with a total of 22 Phase II and Phase III clinical trials, an increase from 16 reported in the previous year, investigating Leukine[supreg] as a vaccine adjuvant for oncology indications, specifically to stimulate the immune response of dendritic cells when used alongside these vaccines. Cancer treatment vaccines differ from the vaccines that protect against viruses, such as the influenza virus. Instead of preventing disease, cancer treatment vaccines aim to stimulate the immune system to attack existing cancer cells in the body.\92\ The applicant states that it has no ownership stake in the development of these cancer treatment vaccines and does not possess control or influence over the design and execution of the clinical trials. The estimated completion dates for Phase III clinical trials vary, with the earliest expected in late 2025 \93\ and the latest in March 2029.\94\ The adjuvant use of Leukine[supreg] in predetermined dosage is distinct from its six FDA-approved indications, all of which have dosages that are based on body weight or body surface area (BSA). The adjuvant use dosages of Leukine[supreg] in clinical trials are generally much smaller than dosages for indications in the FDA-approved labeling. The smallest dose of Leukine[supreg] used for vaccine adjuvant purposes of which the applicant is aware (that is, 70 mcg) would lead to as much as 72 percent of the drug being discarded from a single-dose 250 mcg lyophilized vial, which is the only size available commercially. The applicant suggests that if use of these small doses were to become more common for an approved indication, the percentage of discarded units could increase the discarded drug refund amount that could be owed by the applicant, even though the applicant lacks control or knowledge of the potential variability of the discarded amounts that may occur if Leukine[supreg] were used for such purposes. If another manufacturer were to seek FDA approval for adjuvant use of sargramostim but was not involved in its production, the available single-dose 250-mcg vial presentation of Leukine[supreg] would likely not be optimized for the small doses being studied in these trials. --------------------------------------------------------------------------- \91\ https:/www.accessdata.fda.gov/drugsatfda_docs/label/2022/103362s5249lb1.pdf. \92\ https://www.cancer.org/cancer/managing-cancer/treatment-types/immunotherapy/cancer-vaccines.html. \93\ https://clinicaltrials.gov/study/NCT04229979. \94\ https://clinicaltrials.gov/study/NCT05100641. --------------------------------------------------------------------------- As part of CMS's review of the application, we analyzed existing claims data from the first quarter of 2018 through the last quarter of 2024 and found the percentage of units discarded for the HCPCS code for Leukine[supreg] (J2820) ranged from 1.2 percent to 3.8 percent, which is below the applicable percentage of 10 percent. In addition to the low overall discard rate, the percentage of units discarded showed a standard deviation of less than 1 percent across quarters. This is notably lower than the 6.21 percent average standard deviation observed for rarely utilized orphan drugs, as reported in the CY 2024 PFS final rule (88 FR 52393). The low standard deviation indicates minimal quarter-to-quarter variation, with the percentage of units discarded tightly clustered around a 2.2 percent mean. For context, approximately two-thirds of the quarterly percentage values for units discarded fall within one percentage point above or below the mean, highlighting the consistency and stability of the trend over the 7-year period. Therefore, although the applicant suggests otherwise, this data does not follow a statistical distribution similar to that considered for rarely-utilized orphan drugs meeting the criteria in Sec. 414.940(d)(5), which may not have a normal statistical distribution from quarter to quarter, potentially resulting in highly variable refund amounts as compared with the variability of drugs administered to a higher number of beneficiaries. Since we did not yet know the impact of a new adjuvant indication with a type of immunotherapy commonly referred to as cancer vaccines \95\ on the current percentage of units discarded, we did not propose an increased applicable percentage in the CY 2025 PFS proposed rule. Additionally, because it was not yet known whether sargramostim would be approved for additional indications and dosages, as indicated in the information provided by the applicant, and the available data did not provide enough information for CMS to determine whether Leukine[supreg] had unique circumstances that would prompt an increase in the applicable percentage, we did not propose an increase in the applicable percentage for the drug in the CY 2025 PFS proposed rule. The applicant agreed with CMS' rationale for this decision. --------------------------------------------------------------------------- \95\ https://www.cancerresearch.org/treatment-types/cancer-vaccines. --------------------------------------------------------------------------- Because we are maintaining our determination from the CY 2025 PFS proposed rule, we are not proposing an increase in the applicable percentage for Leukine[supreg] at this time. The applicant may reapply in a future application cycle when more information, such as FDA- approved labeling reflecting new indications or dosages, becomes available. The second application is from the manufacturer of Jelmyto[supreg] (mitomycin for pyelocalyceal solution) \96\ who is requesting an additional 10 percent increase to the 35 percent applicable percentage finalized in the CY 2023 PFS final rule (87 FR 69727 through 69731), bringing the total applicable percentage to 45 percent. Jelmyto[supreg] is indicated for the treatment of adult patients with low-grade Upper Tract Urothelial Cancer (LG-UTUC), a rare cancer with approximately 7,000 new annual cases \97\ in the United States. According to the applicant, Jelmyto[supreg] dosing ranges from 20 mg to 60 mg per single treatment, with the specific dose determined by kidney volume measurements obtained through pyelography.\9\ In the CY 2023 PFS final rule, we stated that Jelmyto[supreg], a drug reconstituted with a hydrogel and administered via ureteral catheter or nephrostomy tube into the kidneys, may leave a substantial amount adhering to the vial wall due to its viscosity, and making it non-extractable. This viscosity results from proprietary reverse-thermal technology (RTGel[supreg]), which enables the drug to transition from a chilled liquid at instillation into a gel at body temperature. We determined that a 35 percent applicable percentage was appropriate--accounting for 25 percent lost to adhesion (that is, an 80 mg package with maximum extractable dose of 60 mg results in at least 25 percent being discarded) and an additional 10 percent to align with drugs without unique circumstances for patients requiring less than the maximum dose of 60 mg. We disagreed that an [[Page 32540]] applicable percentage greater than 35 percent should be applied to such hydrogel products, because we believe that 25 percent accounts for the hydrogel that adheres to the vial, and because we have allowed for an additional 10 percent of drug to be discarded before any refund would be owed. This 35 percent applicable percentage was codified at Sec. 414.940(d)(2), with broad support from commenters, for drugs that are both reconstituted with a hydrogel and subject to variable dosing based on patient-specific characteristics. --------------------------------------------------------------------------- \96\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2024/211728s010lbl.pdf. \97\ https://www.urologyhealth.org/urology-a-z/u/upper-tract-urothelial-carcinoma-(utuc). --------------------------------------------------------------------------- The applicant contends that the current 35 percent applicable percentage does not account for drug loss due to kidney volume variations and different administration routes, both of which the applicant claims meet the patient-specific characteristics outlined in Sec. 414.940(d)(2). Since kidney volume cannot be determined until the pharmacy has prepared the drug and the patient is ready for administration of the initial treatment, the applicant states that patients with smaller-than-average kidney volumes may lead to a higher amount of drug being discarded. Additionally, the amount of Jelmyto[supreg] discarded may increase when providers choose antegrade (via nephrostomy tube) administration over the more common retrograde (via ureteral catheter) administration, as the greater drug delivery efficiency of the antegrade route may result in a lower dose required, leading to more of the drug being discarded. The choice of administration route must be determined on an individual basis, considering multiple factors, including but not limited to the risks and benefits of each route, previous history of failed administration attempts, tolerance to anesthesia, anatomical variations in the urinary tract, patient preference, and the patient's clinical presentation at the time of drug administration.98 99 100 These patient- specific characteristics, combined with the requirement for hydrogel reconstitution, were considered when establishing the current 35 percent applicable percentage. --------------------------------------------------------------------------- \98\ https://bjui-journals.onlinelibrary.wiley.com/doi/full/10.1111/bju.15925. \99\ https://www.sciencedirect.com/science/article/pii/S2405456923001232. \100\ https://www.jelmyto.com/hcp/pdf/jelmyto-antegrade-instillation-overview.pdf. --------------------------------------------------------------------------- In the CY 2024 PFS final rule (88 FR 79057), we stated that we do not consider the following to be unique circumstances warranting an increased applicable percentage at this time: weight-based doses, BSA- based doses, varying surface area of a wound, loading doses, escalation or titration doses, tapering doses, and dose adjustments for toxicity because we believe manufacturers can optimize the availability of products for these circumstances to limit the percentage of discarded units for a drug, unlike the circumstances of manufacturers of drugs that require filtration during the preparation process, as described in section 1847A(h)(8)(B)(ii) of the Act. Consistent with that statement, we generally do not consider dose variations due to patient- or condition-specific characteristics to be unique circumstances for the same reason. That is, manufacturers can optimize the availability of products for these circumstances to minimize discarded amounts. Therefore, we do not consider the drug loss due to patient-specific characteristics, such as variation in kidney volume and factors leading to antegrade administration, to be unique circumstances, and we are not proposing an increase in the applicable percentage of 45 percent for the drug. Consistent with the CY 2023 PFS final rule, we propose that the applicable percentage for Jelmyto[supreg] continue to be 35 percent. We welcome comments on these applications for increased applicable percentage. 2. Average Sales Price: Price Concessions and Bona Fide Service Fees (Sec. 414.804 and 414.802) a. Background Drugs payable under Medicare Part B fall into three general categories: those furnished incident to a physician's service (hereinafter referred to as ``incident to'') (section 1861(s)(2) of the Act), those furnished via a covered item of durable medical equipment (DME) (section 1861(s)(6) of the Act), and other drugs for which coverage is specified by statute (for example, certain vaccines described in sections 1861(s)(10)(A) and (B) of the Act). Payment limits for most drugs separately payable under Medicare Part B are determined using the methodology in section 1847A of the Act, and in many cases, payment is based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on. If CMS determines a payment limit for a drug, it is published in the ASP pricing file or Not Otherwise Classified (NOC) pricing file, which are both updated quarterly. The calculation of payment limits for such drugs payable under Part B is done on a quarterly basis using the manufacturer's ASP (as defined in Sec. 414.902), as applicable, using methodology in section 1847A of the Act. Manufacturers are required to report ASP data to CMS under sections 1847A(f)(2) and 1927(b)(3) of the Act and are instructed to calculate the manufacturer's ASP in accordance with section 1847A(c) of the Act and Sec. 414.804(a). As part of that calculation of the manufacturer's ASP, required under section 1847A(c)(3) of the Act and Sec. 414.804(a)(2), manufacturers must deduct price concessions such as volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase requirement, chargebacks, and rebates (other than rebates under the Medicaid Drug Rebate Program and the Medicare Prescription Drug Inflation Rebate Program). Section 1847A(c)(3) of the Act also provides that, ``[f]or years after 2004, the Secretary may include in such price other price concessions, which may be based on recommendations of the Inspector General, that would result in a reduction of the cost to the purchaser.'' The Secretary implemented an interim rule adopting those statutory categories of price concessions in 2004 (69 FR 47488). In 2006 the Secretary finalized policies for how the manufacturer's ASP is calculated, which required manufacturers to deduct all price concessions from ASP at Sec. 414.804(a)(2). While price concessions are deducted from the manufacturer's ASP (that is, price concessions will lower the resulting manufacturer's ASP), bona fide service fees (BFSFs) are not considered price concessions and, therefore, are not deducted when calculating the manufacturer's ASP (see Sec. 414.804(a)(2)(ii)). In other words, BFSFs do not lower the manufacturer's ASP because they are not part of the calculation. In the Calendar Year (CY) 2007 Physician Fee Schedule (PFS) final rule (71 FR 69665 through 69678) Medicare finalized a definition of BFSF for the purposes of calculating the manufacturer's ASP at Sec. 414.802. The definition finalized in that final rule states that the term ``BFSFs'' means fees paid by a manufacturer to an entity, that represent fair market value for a bona fide, itemized service actually performed on behalf of the manufacturer that the manufacturer would otherwise perform (or contract for) in the absence of the service arrangement, and that are not passed on in whole or in part to a client or customer of an entity, whether or not the entity takes title to the drug. In the CY 2007 PFS final rule, we stated that the BFSF definition provides an appropriate safeguard against the potential risk for inappropriately [[Page 32541]] inflated ASPs. We stated that if a manufacturer has determined that a fee paid meets the other elements of the definition of ``bona fide service fee,'' then the manufacturer may presume, in the absence of any evidence or notice to the contrary, that the fee paid is not passed on to a client or customer of any entity. Further, we stated (71 FR 69669) that in the absence of specific guidance in the Act or Federal regulations, the manufacturer may make reasonable assumptions in its calculations of the manufacturer's ASP, consistent with the general requirements and intent of the Act, Federal regulations, and its customary business practices. We stated that these assumptions may be submitted along with the ASP data. Accurate assessment and reporting of price concessions and BFSFs are essential to correctly calculating the manufacturer's ASP. Improperly classifying price concessions as BFSFs would artificially increase the manufacturer's ASP resulting in Medicare overpayments and higher coinsurance amounts paid by beneficiaries. In December of 2022, the Office of Inspector General (OIG) published a report entitled ``Manufacturers May Need Additional Guidance to Ensure Consistent Calculations of Average Sales Prices'' (hereinafter referred to as the December 2022 OIG report).\101\ That report recommended CMS actively review current guidance related to areas identified in the report and determine whether additional guidance would ensure more accurate and consistent ASP calculations. One area identified was how bundled sales price concessions should be incorporated into the manufacturer's ASP calculation. Manufacturers noted they would like additional guidance regarding whether unbundling a bundled arrangement should include just the discounts contingent on purchase or performance or all discounts that are part of the arrangement, how to treat bundled sales that include covered and noncovered products, and how manufacturers should identify and reallocate discounts with sales that may be considered bundled across time periods. --------------------------------------------------------------------------- \101\ Manufacturers May Need Additional Guidance To Ensure Consistent Calculations of Average Sales Price, Office of Inspector General, U.S. Department of Health and Human Services. December 2022. https://oig.hhs.gov/documents/evaluation/3215/OEI-BL-21-00330-Complete%20Report.pdf. --------------------------------------------------------------------------- This report also recommended CMS give particular consideration to guidance regarding BFSFs. Manufacturers surveyed in the report expressed that there could be inconsistencies and differences in how manufacturers interpret the BFSF definition. For example, manufacturers noted that CMS has not defined the term fair market value (FMV) for the purposes of the BFSF. The report states that CMS should provide additional guidance on the methodology that manufacturers should use to assess FMV and clarify a timeframe after which manufacturers should reassess the FMV of BFSFs. In addition to the recommendations from the December 2022 OIG report, we have concern that certain costs could be classified as BFSFs when they should instead be classified as a price concession in some instances. Further, we are concerned that certain costs that are classified as BFSFs may not represent the FMV for the service. Lastly, the current policy that manufacturers may presume none of the fees are passed on in whole or in part may allow for certain costs to be misclassified when reasonable inquiry would demonstrate that fees are indeed passed on. Such occurrences would likely impact the accuracy of ASP data that is reported to CMS each quarter. For these reasons, in this proposed rule, we are proposing policies to provide additional guidance on two aspects of the calculation of manufacturer's ASP. First, we are proposing regulatory text to specify when certain fees are considered price concessions and on how manufacturers should allocate pricing for drugs sold under a bundled arrangement. Second, we are proposing to revise the definition of BFSFs by (1) specifying the methodology that should be used to determine FMV and the time period after which manufacturers should reassess the FMV; and (2) further explaining what CMS considers to be sufficient evidence of whether or not a fee is passed on in whole or in part to an affiliate,\102\ client, or customer of an entity. We are also proposing that in the absence of specific guidance, manufacturers be required to submit any reasonable assumptions they utilize for manufacturer's ASP calculations (which is currently voluntary), including documentation of the methodology used to determine fair market value and periodic reviews of fair market value. We propose that manufacturers must also submit a warranty or certification from the recipient of the fee that it is not passed on in whole or in part to an affiliate, client, or customer of an entity. Finally, in this proposed rule, we will provide certain non-exhaustive examples of fees that CMS considers to be price concessions and not BFSFs. --------------------------------------------------------------------------- \102\ Affiliate meaning the affiliate of an entity that is receiving the fee that is providing the service. --------------------------------------------------------------------------- The goal of these proposed policies is to avoid inaccurate calculation of the manufacturer's ASP that is used to determine Part B drug payment limits. These proposed policies also will clarify how certain costs should be considered under newer pharmaceutical business practices that may not have been considered when Medicare last finalized the definition of BFSFs in 2007. b. Price Concessions As discussed in the background section, the statute requires that the manufacturer's ASP include volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase requirement, chargebacks, and rebates (other than rebates under the Medicaid Drug Rebate Program and the Medicare Prescription Drug Inflation Rebate Program). Manufacturers can offer certain price concessions as part of bundled arrangements in which price concessions are treated as discounts that are tied to the purchase of the same drug or item or multiple drugs or items. They can also be discounts contingent on certain performance requirements, such as achievement of market share. In addition, price concessions as part of a bundled arrangement may include only Part B drugs or may include both Part B drugs and other products or services. These price concessions within bundled arrangements are accounted for in the calculation of the manufacturer's ASP. We discussed bundled price concessions and considered how manufacturers could apportion such discounts to calculate the manufacturer's ASP in the CY 2007 PFS final rule (71 FR 69673 through 69676). We stated that given the potentially wide range of bundling arrangements that might exist, based on the information we had about such arrangements, we could not determine at that time whether there is a universal approach for treating bundled price concessions in the manufacturer's ASP calculation that would address all potential structures of bundling arrangements in a manner that would achieve our goal of ensuring the accuracy of the ASP payment methodology and preventing inappropriate financial incentives. Then, in the Medicare Payment Advisory Commission's (MedPAC) January 2007 Report to Congress, ``Impact of Changes in Medicare [[Page 32542]] Payments for Part B Drugs,'' \103\ they discussed the issue of allocation of bundled price concessions for purposes of calculating the manufacturer's ASP, noting that ``some manufacturers offer provider discounts for one of their products contingent on purchases of one or more other products.'' In light of MedPAC's recommendation that CMS address the ASP reporting requirements for bundled products and our discussion of bundled price concessions in the CY 2007 PFS rulemaking, we stated in the CY 2008 PFS proposed rule (72 FR 38150 through 38151) that we believe specific guidance in the ASP context is warranted to ensure consistency in ASP reporting across manufacturers and to enhance the accuracy of the ASP payment system. We stated at that time that we found MedPAC's suggestion not to defer further guidance in this area compelling with respect to the potential that manufacturers may make differing assumptions in the absence of specific guidance on how to allocate bundled price concessions in the context of ASP. However, in the CY 2008 PFS final rule (72 FR 66256 through 66258), based on comments recommending a delay and to better understand the concerns stated by the commenters, we did not finalize the regulatory language changes we proposed in the CY 2008 PFS proposed rule at that time. However, we explained that in the absence of specific guidance, manufacturers may make reasonable assumptions in their calculation of ASP, consistent with the general requirements and the intent of the Act, Federal regulations, and their customary business practices. --------------------------------------------------------------------------- \103\ Impact of Changes in Medicare Payments for Part B Drugs, Medicare Payment Advisory Commission. January 2007. https://www.govinfo.gov/content/pkg/GOVPUB-Y3_M46_3-PURL-LPS78409/pdf/GOVPUB-Y3_M46_3-PURL-LPS78409.pdf. --------------------------------------------------------------------------- In the 2007 Prescription Drugs final rule (72 FR 39144 through 39145), Medicaid finalized a definition of the term ``bundled sale'' for the purpose of calculating the average manufacturer price (AMP) and best price, which is codified at Sec. 447.502. The definition was revised in the CY 2016 Covered Outpatient Drugs final rule (81 FR 5181 through 5183) and the 2020 Establishing Minimum Standards in Medicaid State Drug Utilization Review and Supporting Value-Based Purchasing for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability Requirements final rule (85 FR 87022 through 87024). The current definition states that a bundled sale means any arrangement regardless of physical packaging under which the rebate, discount, or other price concession is conditioned upon the purchase of the same drug, drugs of different types (that is, at the nine-digit National Drug Code (NDC) level) or another product or some other performance requirement (for example, the achievement of market share, inclusion or tier placement on a formulary), or where the resulting discounts or other price concessions are greater than those which would have been available had the bundled drugs been purchased separately or outside the bundled arrangement. The definition further states: (1) The discounts in a bundled sale, including those discounts resulting from a contingent arrangement, are allocated proportionally to the total dollar value of the units of all drugs or products sold under the bundled arrangement; (2) For bundled sales where multiple drugs are discounted, the aggregate value of all the discounts in the bundled arrangement must be proportionally allocated across all the drugs or products in the bundle; and (3) Value-based purchasing (VBP) arrangements may qualify as a bundled sale. We are aware that many manufacturers currently utilize portions of the Medicaid definition of bundled sales to identify any bundled arrangements for the purposes of their ASP calculations. In addition, we noted in the CY 2008 PFS final rule (72 FR 66257 through 66258), that most commenters supported an appropriately consistent approach for the treatment of bundled price concessions with both AMP and ASP calculations. We also stated our intention at that time to remain consistent, as appropriate, with the final policy adopted in the 2007 Prescription Drugs final rule (72 FR 39144 through 39145). As discussed in the background section, the December 2022 OIG report recommended that CMS consider providing additional guidance with regard to how bundled sales price concessions should be incorporated into the manufacturer's ASP calculation. The report stated specifically that one manufacturer requested additional guidance pertaining to bundled sales discounts for the following: Whether unbundling a bundled arrangement should include just the discounts contingent on purchase or performance requirements or all discounts that may be part of the underlying arrangement. How to treat bundled sales that include both covered products and noncovered products (that is, products for which there is no government price reporting obligation). How manufacturers should identify and reallocate discounts associated with sales that may be considered bundled across time periods. The manufacturer stated that CMS guidance on these types of temporal bundling will be critical because they will play an important role in the implementation and evaluation of value- and outcomes-based arrangements, which may require assessing the efficacy of a drug over multiple reporting periods. Therefore, in this proposed rule, we propose to add a definition of the term bundled arrangement to Sec. 414.802, similar to that which was proposed in the CY 2008 PFS proposed rule. Specifically, we are proposing the definition to state ``Bundled Arrangement means an arrangement regardless of physical packaging under which the rebate, discount, or other price concession is conditioned upon the purchase of the same drug or biological or other drugs or biologicals or another product or some other performance requirement (for example, the achievement of market share, inclusion or tier placement on a formulary, purchasing patterns, prior purchases), or where the resulting discounts or other price concessions are greater than those which would have been available had the bundled drugs or biologicals been purchased separately or outside the bundled arrangement.'' We also propose adding subparagraphs (iii) and (iv) at Sec. 414.804(a)(2) to provide manufacturers with additional guidance on how to allocate discounts under bundled arrangements, which aligns with Medicaid's definition of bundled sale further described later in this section. This proposal aligns with our previously stated intent to remain consistent, as appropriate, with Medicaid's policy for calculating AMP and aligns with supportive comments discussed in the CY 2007 and 2008 PFS final rule discussions on this topic. Second, to address the suggestion that the agency determine whether additional guidance would be appropriate for the areas described in the December 2022 OIG report for how to account for unbundling a bundled arrangement, we note that Medicaid's definition of ``bundled sale'' at Sec. 447.502 directs that discounts in a bundled sale, including those discounts resulting from a contingent arrangement, are allocated proportionally to the total dollar value of the units of all drugs or products sold under the bundled arrangement. In other words, as noted in 81 FR 5181 through 5183, the ``unbundling'' of both contingent and non-contingent discounts is appropriate because ``all [[Page 32543]] the discounts'' in the bundled arrangement should be proportionally allocated. We propose to adopt this approach for the calculation of the manufacturer's ASP because of our stated intent for consistency with policies for AMP. Consistent application of this policy by all manufacturers reduces the opportunity for improper manipulation of the ASP calculation, providing greater certainty to CMS of the integrity of the submitted ASP. We are, therefore, proposing the same regulatory language be added to Sec. 414.804(a)(2) under paragraphs (iii) and (iv). Third, to address the suggestion that the agency determine whether additional guidance would be appropriate for the areas described in the December 2022 OIG report for how to allocate discounts for bundled sales, we propose that for bundled sales containing both Medicare Part B-covered and non-covered products, manufacturers allocate discounts proportionally as described in the previous paragraph. However, we have heard from interested parties that this method may not be sufficient to cover all cases and could potentially result in inaccurate ASPs. Bundled arrangements may vary depending upon the number and type of products included in a bundling arrangement, whether the price concessions are contingent on the purchase of only one product, the purchase of multiple products, or the inclusion of one or more products on a formulary, and the timing of the price concessions. For example, a different allocation method may be needed to account for variable costs per product in the bundled arrangement. We solicit comment on if there are other methods of allocating discounts in these circumstances that would more accurately represent ASP. Finally, to address the suggestion that the agency determine whether additional guidance would be appropriate for the areas described in the December 2022 OIG report as it relates to how to reallocate discounts associated with sales that may be considered bundled across time periods (for example, outcomes-based arrangements or value-based purchasing arrangements), we are not proposing to adopt the portion of the Medicaid definition of bundled sale stating that value-based purchasing arrangements may qualify as a bundled sale because we are continuing to evaluate how value-based purchasing arrangements should be considered for drugs payable under Medicare Part

B. We solicit comments on how discounts associated with sales that may

be considered bundled across time periods could be accounted for in the manufacturer's ASP calculation. We solicit comments on this proposal. c. Bona Fide Service Fees As described in the background section above, currently, the term ``BFSFs'' means fees paid by a manufacturer to an entity, that (1) represent FMV (2) for a bona fide, itemized service actually performed on behalf of the manufacturer (3) that the manufacturer would otherwise perform (or contract for) in the absence of the service arrangement, and (4) that are not passed on in whole or in part to a client or customer of an entity, whether or not the entity takes title to the drug.\104\ A fee must meet all four conditions of the definition to be considered a BFSF rather than a price concession to be deducted from ASP. We are proposing two changes to the BFSFs regarding (1) what is considered FMV and (2) proposing what evidence is required to be provided by a manufacturer to show that a fee is not passed on in whole or in part to an affiliate, client, or customer of an entity, whether or not the entity takes title to the drug. In addition, we are proposing an addition to the list of price concessions to include when certain fees paid by a manufacturer are presumed to be price concessions. --------------------------------------------------------------------------- \104\ 42 CFR 414.802. --------------------------------------------------------------------------- (1) Fair Market Value One element of the definition of BFSFs specifies that the fees must represent FMV for the service. To date, we have not issued guidance on a specific method that manufacturers must use to determine whether a fee represents FMV. In the CY 2007 PFS final rule (71 FR 69666 through 69670), we stated that the appropriate method or methods for determining whether a fee represents FMV may depend upon the specifics of the contracting terms, such as the activities the entity will perform and the agreed-upon mechanism for establishing the payment (for example, percentage of goods purchased). We stated in that final rule that we believe manufacturers are well-equipped to determine the most appropriate, industry-accepted method for determining FMV of drug distribution services for which they contract. Therefore, we did not mandate the specific method manufacturers must use to determine whether a fee represents FMV for purposes of excluding BFSFs from the calculation of ASP. As discussed in the background section above, the December 2022 OIG report identified BFSFs as an area where CMS could provide additional guidance to manufacturers and further stated that manufacturers expressed that competitors may be taking disparate approaches when applying CMS's four-part test to make these determinations. In some cases, BFSFs that are very high could mask price concessions that are passed on by the entity performing the bona fide service so that the product's ASP can remain high. Conversely, certain fees that are BFSFs could be incorrectly classified as a price concession to reduce the manufacturer's ASP and mask price increases that could be faster than the rate of inflation for purposes of the Medicare Prescription Drug Inflation Rebate Program. Consequently, we recommend additional guardrails to ensure that BFSFs are correctly identified, and that the manufacturer's ASP is not manipulated to be artificially increased or decreased. Accordingly, in this proposed rule, we are (1) proposing revisions to the definition of BFSFs at Sec. 414.802 that retains the existing four prong test (as described in the background section) and adds proposed requirements for the standards and the methodology that should be used to determine the FMV for such fees; (2) the time period after which manufacturers should reassess the FMV; and (3) any FMV analysis of fees that vary directly with the amount of drug sold or price of a manufacturer's drug must be conducted by an independent third party that does not have a conflict of interest. Based on the structure or arrangement of certain fees that meet the definition of BFSF, we propose additional requirements for the standards and methodology that should be used to determine FMV. Specifically, we propose that for fees paid by a manufacturer to an entity that do not vary directly with the amount of drug sold or price of a manufacturer's drug, that the FME must be determined either based on comparable market transactions that generally reflect current market conditions or the cost of the service plus a reasonable markup to the total cost. We propose that, for fees paid by a manufacturer to an entity that vary directly with the amount of drug sold or price of a manufacturer's drug, the FMV must be determined by using the cost of the service and adding a reasonable markup to the total cost. If any material portion of cost data is not available, manufacturers should follow a market- based approach based on verifiable market data until such time as sufficient cost data becomes available. In addition, [[Page 32544]] we propose that under such circumstances that the FMV assessment must be conducted by an independent third-party valuator. This means that the valuator must not have any financial relationship (other than the arrangement to conduct FMV analyses) with either party to the arrangement and no stake in the outcome of the valuation. The FMV analysis must be documented with a clear explanation, including a description of the methodology used. Regarding FMV assessments, we propose manufacturers conduct periodic updates of any FMV analyses for service arrangements that are ongoing, at a frequency no less than the renewal frequency of the agreement (that is, annually for annual renewals). Documentation of this update should be included in the reasonable assumption documentation that corresponds with the quarter when the update is conducted. Implementing standards and defining the methodology manufacturers must use to determine FMV will better establish uniform industry practices and provide the desired clarity requested by manufacturers in the December 2022 OIG report. We solicit comments on this proposal. (2) Fees Presumed To Be Price Concessions We are proposing revisions to Sec. 414.804(a)(2) to specify when certain fees should be presumed to be price concessions. Specifically, we propose that if fees paid by a manufacturer to an entity vary directly with the amount or price of a manufacturer's drugs (that is, the fees paid are (i) percentage-based fees or (ii) flat fees or fixed fees that are designed in such a way as to approximate percentage-based fees), such fees are presumed to be price concessions to be deducted from the calculation of the manufacturer's ASP unless such manufacturer determines such fees to be FMV using a cost-based approach which may be further validated with market-based data. (3) Evidence Another element of the BFSF definition specifies that the BFSF must not be passed on, in whole or in part, to a client or customer of an entity. When finalizing the CY 2007 PFS final rule (71 FR 69669 through 69670), we stated that there may be significant barriers that limit a manufacturer's ability to determine whether a fee that otherwise meets the definition of BFSF is passed on, in whole or in part, to a client or customer of any entity. We noted in the preamble section of that rule that we believe that it is essential to retain the ``not passed on'' element in the definition of BFSFs given that the ``not passed on'' element is a key factor in distinguishing a price concession from a BFSF because, if a fee that is passed on is excluded from the ASP calculation, then there is a greater risk of the ASP being inappropriately inflated. We stated that if a manufacturer has determined that a fee paid meets the other elements of the definition of ``bona fide service fees,'' then the manufacturer may presume, in the absence of any evidence or notice to the contrary, that the fee paid is not passed on to a client or customer of any entity. There may be certain fees that a manufacturer classifies as BFSFs for the purposes of calculating the manufacturer's ASP that should actually be considered price concessions and, therefore, deducted from the manufacturer's ASP. In the December 2022 OIG report, manufacturers reported inconsistent practices in the treatment of BFSFs. As such, we propose that it is no longer appropriate that a manufacturer may presume, in absence of any evidence or notice to the contrary, that a fee paid is not passed on to an affiliate, client, or customer of any entity. This proposed revision to the definition specifies that, in addition to a client or customer of any entity, that the fee also shall not be passed on to an affiliate, which means an affiliate of an entity that is receiving the fee the tis providing the service. We propose the addition of the word affiliate to more comprehensively address the type of arrangements that may exist between certain entities. In addition, we propose that the manufacturer be responsible for obtaining a certification or warranty from the entity receiving the fee stating that such fee will not be passed on to an affiliate, client, or customer of any entity. We are proposing to add new subparagraph Sec. 414.804(a)(5)(iii) requiring manufacturers to provide certification letters from any recipient of a BFSF that the fee is not passed on in whole or in part to an affiliate, client or customer of an entity, whether or not the entity takes title to the drug. We also propose to revise Sec. 414.804(a)(5) to add additional data submission requirements. This paragraph currently states that the manufacturer's average sales price must be calculated by the manufacturer every calendar quarter and submitted to CMS within 30 days of the close of the quarter. The first quarter submission must be submitted by April 30, 2004. Subsequent reports are due not later than 30 days after the last day of each calendar quarter. We are proposing to add a header to this section titled ``Submission Requirements'' and remove ``The first quarter submission must be submitted by April 30, 2004. Subsequent reports are due not later than 30 days after the last day of each calendar quarter.'' We are also proposing to add three paragraphs (i, ii, and iii). The proposed text would be revised to state that manufacturers must submit the following to CMS within 30 days of the close of the quarter: The manufacturer's average sales price, which must be calculated by the manufacturer every calendar quarter. The first quarter submission must be submitted by April 30, 2004. Effective January 1, 2026, reasonable assumptions for calculation of the manufacturer's ASP including the fair market value analysis for bona fide service fees, consistent with the general requirements and intent of the Act, Federal regulations, and its customary business practices, including documentation of the methodology used to determine fair market value and periodic reviews of fair market value. Effective January 1, 2026, certification letter from the recipient of a bona fide service fee (as defined under Sec. 414.802) as evidence that the fee is not passed on in whole or in part to an affiliate, client, or customer of an entity, whether or not the entity takes title to the drug. These data submission requirements, if finalized, would be effective for sales occurring January 1, 2026, and after and that data would be due to CMS by April 30, 2026, and used in the July 2026 pricing file. The newly proposed certification letter should be submitted in the current portal and uploaded under reasonable assumptions. Lastly, manufacturers must maintain and submit to CMS a copy of the FMV analysis, confirming it was conducted in a timely manner, documentation (such as a certification letter from the recipient of the fee) that the fee is not passed on in whole or in part to an affiliate, client or customer of an entity, whether or not the entity takes title to the drug, and documentation (such as a mutual representation in the relevant services agreement) that both parties have agreed to represent the payment as a BFSF in a consistent manner to all third parties, including any affiliates, clients, and governmental agencies. We solicit comment on this proposal. (3) Further Guidance on the BFSF Definition In the CY 2007 PFS final rule (71 FR 69667 through 69668), we discussed the option of providing a list of bona fide [[Page 32545]] services. However, many commenters at that time were opposed to establishing a list of bona fide services because it would require ongoing refinement for manufacturers to accurately calculate ASP. In that final rule, we did not establish a list of bona fide services because we wanted to avoid inadvertently limiting the scope of what could constitute a bona fide service. We continue to believe that constructing an exhaustive list could be prohibitive over time. However, in this proposed rule, we are proposing some specific, non- exhaustive examples of fees and how they should be considered in the calculation of manufacturer's ASP. First, we note that certain payments by drug manufacturers to drug distributors, which lower the price that distributors and purchasing physicians pay, appear to be price concessions. In 2024, the Department of Justice filed a complaint against a manufacturer alleging the company engaged in fraudulent drug price reporting practices by classifying payments to distributors to cover credit card processing fees as BFSFs instead of price concessions.\105\ The manufacturers' payment allegedly enabled the purchasers of the product to use credit cards to purchase drugs from the distributor without incurring an additional fee that would otherwise be charged, while also taking advantage of the benefits of using credit cards, such as ``cash back'' and other credit card rewards. This type of arrangement would lower the price of the drug to both the distributor and the distributors' customers and the manufacturers' payments should be classified as price concessions, which are deducted from ASP, not BFSFs. --------------------------------------------------------------------------- \105\ United States Files Complaint Against Regeneron Pharmaceuticals Alleging Fraudulent Drug Price Reporting, District of Massachusetts, United States Attorney's Office. April 2024. https://www.justice.gov/usao-ma/pr/united-states-files-complaint-against-regeneron-pharmaceuticals-alleging-fraudulent-drug. --------------------------------------------------------------------------- Second, as discussed in our Autologous Cell-based Immunotherapy and Gene Therapy Payment proposal, we also propose that any payment by the manufacturer to an entity for tissue procurement is not considered a BFSF for the purposes of calculating the manufacturer's ASP since this is an integral part of the manufacturing process for autologous cell- based immunotherapy or gene therapy and should be included in the price of the product. Third, certain fees for data sharing services about the product appear to exceed the FMV for the service or are not for bona fide services because the data is required for legal compliance and audit purposes under the services agreement (such as complete and timely data to validate that a rebate or discount has been earned or is not duplicative prior to its payment by the manufacturer). If a manufacturer pays an entity for providing data back to the manufacturer about the product being sold, that fee should be assessed for FMV as discussed previously in this section and we propose a certification or warranty from the entity providing the service that the fee is not passed on in whole or in part to an affiliate, client, or customer of an entity. As proposed previously in this section, we propose that such certification or warranty should be submitted by the manufacturer to CMS as part of the quarterly ASP data submission. Lastly, certain fees paid for distribution services appear to exceed the FMV for the service. Similar to data sharing services, if a manufacturer pays an entity for distributing their product, the fee should be assessed for FMV, and we propose a certification or warranty should be provided by the entity providing the service that the fee is not passed on in whole or in part to an affiliate, client, or customer of an entity. As proposed previously in this section, we propose that such certification or warranty should be submitted by the manufacturer to CMS as part of the quarterly ASP data submission. We solicit comment on these proposals. d. Summary In summary, we are proposing to add a definition of bundled arrangement at Sec. 414.802 and to update Sec. 414.804(a)(2) to provide guidance to manufacturers regarding pricing of bundled price concessions. We are also proposing new regulatory text at Sec. 414.804(a)(2)(i) to specify when certain fees are considered price concessions. We propose revisions to the definition of BFSFs at Sec. 414.802 to specify: (1) standards and the methodology that should be used to determine FMV for such fees; (2) the time period after which manufacturers should reassess the FMV; and (3) that any FMV analysis regarding BFSFs that vary directly with the amount of drug sold or price of a manufacturer's drug must be conducted by an independent third party that does not have a conflict of interest. Further, we propose revising Sec. 414.804(a)(5) to update requirements for ASP data submissions as they relate to reasonable assumptions and evidence that BFSFs are not passed on. Finally, we are proposing a non- exhaustive list of certain fees that we either do not consider BFSFs or may not be in line with FMV. 3. Average Sales Price: Units Sold at Maximum Fair Price The Act establishes the Medicare Drug Price Negotiation Program (the ``Negotiation Program'') to negotiate a maximum fair price (MFP) \106\ for certain high expenditure, single source drugs payable under Medicare Part B and covered under Part D (each, a ``selected drug''). For the initial price applicability year 2026, CMS reached agreement on a negotiated price for all 10 selected drugs covered under Part D. Then, for initial price applicability year 2027, CMS selected an additional 15 drugs covered under Part D. For the third year of the Negotiation Program, initial price applicability year 2028, CMS will select for negotiation up to 15 high expenditure, single source drugs payable under Part B and/or covered under Part D. --------------------------------------------------------------------------- \106\ Defined at section 1191(c)(3) of the Act. --------------------------------------------------------------------------- Beginning in initial price applicability year 2028, for selected drugs payable under Part B, section 1847A(b)(1)(B) of the Act sets the Medicare Part B payment limit during the price applicability period as 106 percent of MFP. Payment limits are published on the ASP drug pricing file, which is updated quarterly. For selected drugs with a negotiated price for initial price applicability year 2026 and 2027 that have utilization under Medicare Part B, we clarify that the Part B payment limit will not be based on the MFP unless it is selected for renegotiation, pursuant to section 1194(f)(3) of the Act and as discussed in section 130.2 of the Medicare Drug Price Negotiation Program: Draft Guidance, Implementation of sections 1191 through 1198 of the Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028; \107\ and there is an agreed-upon renegotiated MFP. --------------------------------------------------------------------------- \107\ See: https://www.cms.gov/files/document/ipay-2028-draft-guidance.pdf. --------------------------------------------------------------------------- Manufacturers of drugs payable under Part B are required to report the manufacturer's ASP to CMS each quarter as described in sections 1927(b)(3) and 1847A(f) of the Act, even when a drug is a selected drug with an MFP, including a renegotiated MFP. The statute directs that the manufacturer's ASP include sales to all purchasers in the United States (section 1847A(c)(1) of the Act) with two exempted categories of sales: (1) sales exempt from best price under section 1927(c)(1)(C)(i) of the Act; and (2) sales that are merely nominal in [[Page 32546]] amount as applied for purposes of section 1927(c)(1)(C)(ii)(III) of the Act, as limited by section 1927(c)(1)(D) of the Act. Units of drugs sold at MFP do not fall in either of those categories. In addition, units sold at MFP are expressly included in the determination of best price, as stated in section 1927(c)(1)(C)(ii)(V) of the Act. Therefore, since the statutory language does not expressly or implicitly exempt units of Medicare Part B or Part D MFP sales from the calculation of the manufacturer's ASP, we clarify in this proposed rule that units of selected drugs sold at MFP are included in the calculation of the manufacturer's ASP described in section 1847A(c) of the Act effective January 1, 2026. The file used for publishing payment limits for drugs covered under Part B is usually referred to as the ``ASP drug pricing file'' likely because most drugs listed on the file have a payment limit based on the ASP (usually 106 percent of ASP). However, the file also contains the payment limits based on other pricing metrics. For example, several provisions in section 1847A of the Act require that the payment limit be based on a pricing metric other than ASP under specific circumstances, including the following: When the Wholesale acquisition cost (WAC) is less than ASP for a single source drug or biological (section 1847A(b)(4) of the Act); When ASP exceeds the widely available market price (WAMP) or average manufacturer price (AMP) (section 1847A(d) of the Act); and For a selected drug, 106 percent of MFP (section 1847A(b)(1) of the Act). In such circumstances, only the actual payment limit is published on the pricing file (and no ASP information is displayed). 4. Autologous Cell-Based Immunotherapy and Gene Therapy Payment a. Background Medicare Part B covers many cellular immunotherapies and gene therapies that are FDA-approved under a biologics license application (BLA) as incident to drugs and biologicals under section 1861(s)(2) of the Act, which are paid under section 1847A of the Act (typically, at ASP plus 6 percent). Cell-based autologous therapies are a particular subset, which require cells to be collected from the patient, altered to create the intended therapy, and then administered to the same patient for treatment of a condition. These steps generally include cell collection from the patient via apheresis (including leukapheresis), surgical removal, biopsies or other means, the cells are immediately transported at very low temperatures to a manufacturing site for genetic engineering and/or other steps (for example, activation, cell expansion, and/or quality testing). After the manufacturing steps are complete, the final product is transported back to the healthcare provider or treatment facility to be administered to the patient. For example, for Chimeric Antigen Receptor (CAR) T-cell therapy, T- cells are collected from the patient via leukapheresis and genetically engineered to express a chimeric antigen receptor that will bind to a certain protein on a patient's cancerous cells. The CAR T-cells are then administered to the same patient to attack certain cancerous cells. For other autologous cell-based therapy, the preparatory and manufacturing steps follow a similar general process. Many studies show that the manufacturing steps for these therapies have a very high cost of goods sold (COGS), including very high proportion of labor costs in manufacturing, which ultimately leads to a high final cost of the therapy.108 109 Some also note that the acquisition of raw materials, including tissue procurement, and quality-related activities are other top contributors to the COGS for autologous cell-based therapies. As technologies advance, there has been continued research to scale cell-based therapies, including a possible shift to allogeneic cell therapy, in which cell collection would be from healthy donors or stem cells. Manufacturing allogenic cell-based therapy would allow the therapy to be ready ahead of time instead of the multiple-week wait time between cell collection and administration of the treatment for allogeneic therapies.110 111 112 Throughout research and discussions of cell-based therapies, tissue procurement is a key consideration in the discussion of the COGS. This further distinguishes all types of tissue procurement, whether it be for allogenic or autologous therapies, are part of the COGS and part of the manufacturing process for the products. --------------------------------------------------------------------------- \108\ Yonatan Y. Lipsitz, William D. Milligan, Ian Fitzpatrick, et al, A roadmap for cost-of-goods planning to guide economic production of cell therapy products, Cytotherapy,Volume 19, Issue 12, 2017, Pages 1383-1391. \109\ Brian Canter, Sabine Sussman, Stephen Colvill, Nitzan Arad, Elizabeth Staton, Arti Rai, Introducing biosimilar competition for cell and gene therapy products, Journal of Law and the Biosciences, Volume 11, Issue 2, July-December 2024, lsae015, https://doi.org/10.1093/jlb/lsae015. \110\ Caldwell KJ, Gottschalk S, Talleur AC. Allogeneic CAR Cell Therapy-More Than a Pipe Dream. Front Immunol. 2021 Jan 8;11:618427. doi: 10.3389/fimmu.2020.618427. PMID: 33488631; PMCID: PMC7821739. \111\ Abbasalizadeh, S., Pakzad, M., Cabral, J.M.S., & Baharvand, H. (2017). Allogeneic cell therapy manufacturing: process development technologies and facility design options. Expert Opinion on Biological Therapy, 17(10), 1201-1219. https://doi.org/10.1080/14712598.2017.1354982. \112\ Pigeau GM, Csaszar E, Dulgar-Tulloch A. Commercial Scale Manufacturing of Allogeneic Cell Therapy. Front Med (Lausanne). 2018 Aug 22;5:233. doi: 10.3389/fmed.2018.00233. PMID: 30186836; PMCID: PMC6113399. --------------------------------------------------------------------------- As technologies for autologous cell-based immunotherapies and gene therapies continue to advance, we aim for payment policies amongst these therapies to be consistent. Therefore, in this proposed rule, we are proposing policies for how Medicare pays for the manufacturing steps across all types of autologous cell-based immunotherapies and gene therapies and proposing how these steps should be considered by manufacturers when submitting ASP data to CMS. b. Payment Medicare payment for the manufacturing steps to CAR T-cell therapies have previously been discussed in rulemaking, specifically in the CY 2019, 2020, and 2021 Medicare hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment system final rules and the CY 2025 Physician Fee Schedule (PFS) final rule. In the 2019 OPPS/ASC final rule (83 FR 58904 through 58908), we finalized policies for payment of four Level III CPT codes (0537T through 0540T). We finalized that CPT codes describing (1) harvesting of blood-derived T lymphocytes, (2) preparation of T lymphocytes for transportation, cryopreservation, and storage, and (3) preparation of the CAR T-cell therapy for administration are not payable under OPPS. We stated that these codes describe various steps required to collect and prepare the genetically modified T-cells, and Medicare does not generally pay separately for each step used to manufacture a drug or biological. We noted that the billing and payment codes for the CAR T- cell therapies include leukapheresis and dose preparation procedures because these services are included in the manufacturing of these biologicals. In that final rule, we also finalized to pay separately for the Level III CPT code describing the administration service for CAR T-cell therapy. This policy was reiterated in the CY 2020 and 2021 OPPS/ASC final rules (84 FR 61231 through 61234 and 85 FR 85949 through 85951, respectively). [[Page 32547]] In September 2023, the CPT Editorial Panel deleted four Level III codes (0537T through 0540T) and created four new Level I codes (38225 through 38228) that describe only the steps of the complex CAR-T Therapy process performed and supervised by physicians: CPT code 38225 (Chimeric antigen receptor T-cell (CAR-T) therapy; harvesting of blood- derived T lymphocytes for development of genetically modified autologous CAR-T cells, per day); 38226 (Chimeric antigen receptor T- cell (CAR-T) therapy; preparation of blood-derived T lymphocytes for transportation (e.g., cryopreservation, storage)); 38227 (Chimeric antigen receptor T-cell (CAR-T) therapy; receipt and preparation of CAR-T cells for administration); 38228 (Chimeric antigen receptor T- cell (CAR-T) therapy; CAR-T cell administration, autologous). In the CY 2025 PFS final rule (89 FR 97779 through 97780), we finalized the policy to continue to bundle payment under the PFS for CAR-T services described under CPT codes 38225, 38226, and 38227. We stated that bundling payment is appropriate for these codes to align with OPPS policies to not pay separately for each step used to manufacture a drug or biological. In that final rule we also finalized to pay separately for CPT code 38228 (the service of CAR T-cell therapy administration), which aligns with OPPS policy. To date, payment for procedures that are required for manufacturing other autologous cell-based immunotherapies and gene therapies (that are not CAR T-cell therapies) have not been explicitly addressed. As discussed in the background section above, the tissue procurement step for all autologous cell-based therapies is a pivotal part of the manufacturing process and a key component of the overall cost of the product, that is, COGS. In addition, if certain therapies could be scaled in a way that they could be allogenic in nature, we see that the tissue procurement step would even more clearly be considered a manufacturing step. Therefore, in this proposed rule, we propose that preparatory procedures for tissue procurement required for manufacturing an autologous cell-based immunotherapy or gene therapy be included in the payment of the product itself. This proposal continues the current payment policies for CAR T-cell therapies as discussed earlier in this section and extends the same payment policy to other autologous cell- based therapies. In our evaluation of each therapy, there are similar sequences of steps as we described in the background section. Consistent with previous rulemaking, we propose that Medicare not pay separately for each step used to manufacture an autologous cell-based immunotherapy or gene therapy. In other words, Medicare does not pay separately for the collection of raw materials or labor associated with the collection of raw materials for a drug or biological that are essentially part of the COGS. Payment for the raw materials and any labor associated with collection of the raw materials is included in the payment of the drug or biological itself, using the billing and payment code for the product. We solicit comments on the proposal to continue this policy for CAR T-cell therapies and extension of the policy to other autologous cell- based immunotherapy or gene therapies. c. Average Sales Price Payment limit calculations for drugs payable under Part B are done on a quarterly basis using the manufacturer's ASP (as defined in Sec. 414.902) using methodology in section 1847A of the Act. Manufacturers are required to report ASP data to CMS under sections 1847A(f)(2) and 1927(b)(3) of the Act. Manufacturers are instructed to calculate the manufacturer's ASP in accordance with section 1847A(c) of the Act and Sec. 414.804(a). To date, we have not addressed how manufacturers of autologous cell-based immunotherapy or gene therapy should account for the procedures for the collection of cells used to manufacture the product into the calculation of the manufacturer's ASP. As discussed in section III.A.3.a. of this proposed rule, the COGS and manufacturing process for an autologous cell-based immunotherapy or gene therapy include tissue procurement (that is, the collection of cells from the patient). Consistent with the proposal in the previous section that preparatory procedures required for manufacturing an autologous cell-based immunotherapy or gene therapy be included in the payment of the product itself, we also propose that, beginning January 1, 2026 (that is, data reflecting sales beginning on that date), any preparatory procedures for tissue procurement required for manufacturing an autologous cell-based immunotherapy or gene therapy that are paid by the manufacturer be included in the calculation of the manufacturer's ASP. We also propose that any payment by the manufacturer to an entity for tissue procurement is not considered a bona fide service fee for the purposes of calculating the manufacturer's ASP since this is an integral part of the manufacturing process for autologous cell-based immunotherapy or gene therapy and should be included in the price of the product. We solicit comment on this proposal. d. Summary In summary, we propose that preparatory procedures for tissue procurement required for manufacturing an autologous cell-based immunotherapy or gene therapy be included in the payment of the product itself and that, beginning January 1, 2026, any preparatory procedures for tissue procurement required for manufacturing an autologous cell- based immunotherapy or gene therapy that were paid for by the manufacturer be included in the calculation of the manufacturer's ASP.

1. Background on RHC and FQHC Payment Methodologies

As provided in 42 CFR part 405 subpart X of our regulations, RHC and FQHC visits generally are defined as face-to-face encounters between a patient and one or more RHC or FQHC practitioners during which one or more RHC or FQHC qualifying services are furnished. RHC and FQHC practitioners are physicians, NPs, PAs, CNMs, clinical psychologists (CPs), licensed marriage and family therapists, mental health counselors, and clinical social workers, and under certain conditions, a registered nurse or licensed practical nurse that is furnishing care to a homebound RHC or FQHC patient in an area verified as having shortage of home health agencies. Transitional Care Management (TCM) services can also be paid by Medicare as an RHC or FQHC visit. In addition, Diabetes Self-Management Training (DSMT) or Medical Nutrition Therapy (MNT) sessions furnished by a certified DSMT or MNT program may also be considered FQHC visits for Medicare payment purposes. Only medically necessary medical, mental health, or qualified preventive health services that require the skill level of an RHC or FQHC practitioner are RHC or FQHC billable visits. Services furnished by auxiliary personnel (for example, nurses, medical assistants, or other clinical personnel acting under the supervision of the RHC or FQHC practitioner) are considered incident to the visit and are included in the per-visit payment. RHCs generally are paid an all-inclusive rate (AIR) for all medically [[Page 32548]] necessary medical and mental health services and qualified preventive health services furnished on the same day (with some exceptions). The AIR is subject to a payment limit, meaning that an RHC will not receive any payment beyond the specified limit amount per visit. As of April 1, 2021, all RHCs are subject to statutory upper payment limits determined in accordance with section 1833(f) of the Act, as amended by section 130 of the Consolidated Appropriations Act, 2021 (Pub. L. 116-260). FQHCs were paid under the same AIR methodology until October 1, 2014. Beginning on that date, in accordance with section 1834(o) of the Act (as added by section 10501(i)(3) of the Patient Protection and Affordable Care Act (Pub. L. 111-148)), FQHCs began to transition to the FQHC PPS system, in which they are paid based on the lesser of the FQHC PPS rate or their actual charges. The FQHC PPS rate is adjusted for geographic differences in the cost of services by the FQHC PPS geographic adjustment factor (GAF). The rate is increased by 34 percent when an FQHC furnishes care to a patient that is new to the FQHC, or to a beneficiary receiving an initial preventive physical examination (IPPE) or has an annual wellness visit (AWV). Both the RHC AIR and FQHC PPS payment rates were initially designed to reflect the cost of all services and supplies that an RHC or FQHC furnishes to a patient in a single day. These nearly all-inclusive rates are not adjusted at the individual level for the complexity of individual patient health care needs, the length of an individual visit, or the number or type of practitioners involved in the patient's care. Instead for RHCs, all costs for the facility over the course of the year are aggregated and an AIR is derived from these aggregate expenditures. The FQHC PPS base rate is updated annually by the percentage increase in the FQHC market basket reduced by a productivity adjustment. For CY 2025, we rebased and revised the 2017-based FQHC market basket to reflect a 2022 base year (89 FR 98023 through 98032).

2. Payment for Care Coordination Services

a. Background In the last several years of rulemaking, we have expanded the scope of care coordination services (formerly referred to as care management services) that are billable using HCPCS code G0511. More recently, in the CY 2025 PFS final rule, we unbundled the individual HCPCS codes that make up G0511 (89 FR 97999 through 98000). We have also been engaged in a multi-year examination of coordinated and collaborative care services in professional settings, and as a result, established codes and separate payment to independently recognize and pay for these important services. As stated in the CY 2016 PFS Final Rule (80 FR 71080 through 71088), the care coordination included in services, such as office visits, does not always adequately describe the non-face-to- face care management work involved in primary care and similar care relationships. We noted that payment for office visits may not reflect all the services and resources required to furnish comprehensive, coordinated care management for certain categories of beneficiaries, such as those who are returning to a community setting following discharge from a hospital or skilled nursing facility (SNF) stay. Over the last decade, we have updated RHC and FQHC payment policies as appropriate, and we remain committed to improving how Medicare payment recognizes the resources involved in furnishing covered services that encompass aspects of advanced primary care furnished by interprofessional care teams and typically concentrating on the delivery of appropriate preventive care to patients and the management of individuals' chronic conditions as they progress over time. As a result, we reaffirmed our support of primary care and recognized care management as one of the critical components of primary care by implementing significant changes aimed at better capturing the resources required for care management services, including chronic care management (CCM), principal care management (PCM), general behavior health integration (BHI), chronic pain management (CPM), transitional care management (TCM), remote physiologic monitoring (RPM), remote therapeutic monitoring (RTM), community health integration (CHI), principal illness navigation (PIN), PIN-peer support services and Advanced Primary Care Management (APCM). For RHCs and FQHCs, we established payment for these suites of care coordination services outside of the RHC AIR and FQHC PPS. That is, payment is made in addition to the otherwise billable visit. In the CY 2025 PFS final rule (89 FR 97870 through 97874), we discussed how we established coding and payment under the PFS for a newly defined set of APCM services described and defined by three new HCPCS G-codes. This new coding reflects the recognized effectiveness and growing adoption of the advanced primary care approach to care. It also encompasses a broader range of services and simplifies the billing and documentation requirements, as compared to existing care management codes. The finalized coding for APCM incorporated elements of several existing care management services into a bundle that we have already considered to be care coordination services paid separately to RHCs and FQHCs using HCPCS code G0511 (for example, CCM and PCM). In addition, the coding for APCM incorporated elements of communication technology- based services (CTBS) into a bundle that we have already considered to be virtual communications paid separately to RHCs and FQHCs using HCPCS code G0071. Therefore, to allow RHCs and FQHCs the ability to simplify the billing and documentation requirements associated with furnishing APCM services we finalized in the CY 2025 PFS final rule to allow RHCs and FQHCs to bill for these services and receive separate payment. Further, the APCM code sets vary by the degree of complexity of patient conditions (that is, non-complex and complex CCM for multiple chronic conditions or PCM for a single high-risk condition), and whether the number of minutes spent by clinical staff or the physician or non-physician practitioner (NPP) is used to meet time thresholds for billing. In the CY 2025 final rule, we finalized and adopted the three new APCM codes G0556, G0557, and G0558. RHCs and FQHCs are required to use the more specific coding, that is, the three HCPCS G-codes listed above when furnishing APCM. These services are paid in addition to the otherwise billable visit under the RHC AIR methodology or FQHC PPS because we believe that they are similar to the other care coordination services, such as, CCM, PCM, and RPM. That is, APCM involves non-face to-face care coordination of which the costs associated with these services are not captured in the RHC AIR or FQHC PPS rate. Similarly to the care coordination services, payment for APCM is based on the PFS national non-facility rate. It is important to note that if RHCs and FQHCs furnish APCM services, the HCPCS codes for APCM are per calendar month bundles. Consequently, if the RHC/FQHC furnishes APCM then they would not bill for certain other individual care coordination services. For further discussion on duplicative services and concurrent billing restrictions regarding APCM policies, please refer to the CY 2025 PFS final rule (89 FR 97710). [[Page 32549]] b. Integrating Behavioral Health Into Advanced Primary Care Management (APCM) In the CY 2018 PFS final rule, we established requirements and separate payment for general Behavioral Health Integration (BHI) and Psychiatric Collaborative Care Model (CoCM) services furnished in RHCs and FQHCs (82 FR 53169 through 53180). General BHI and Psychiatric CoCM services are based on a model of behavioral health integration that enhances usual primary care by adding two key services to the primary care team: care management support for patients receiving behavioral health treatment and regular psychiatric inter-specialty consultation. In the CY 2018 PFS final rule, we also initiated the use of HCPCS codes G0511 and G0512 to pay for general care coordination services and CoCM services, respectively. As discussed in section II.G.1. of this proposed rule, we recognize that patients with chronic health conditions are ``more likely to have related behavioral health concerns and find it easier to improve chronic conditions when these concerns are also addressed.'' \113\ Integrating behavioral health with primary care has been shown to improve outcomes like reduced depression severity, and enhancing patient's experience of care. \114\ We explain that in response to comments received for CY 2025 rulemaking, for services paid under the PFS, we are proposing to create optional add-on codes for APCM services that would facilitate providing complementary BHI services. --------------------------------------------------------------------------- \113\ https://integrationacademy.ahrq.gov/about/integrated- behavioral- health#:~:text=Integrated%20behavioral%20health%20offers%20many,these %20concerns%20are%20also%20addressed. \114\ Balasubramanian, Bijal, Deborah Cohen, Katelyn Jetelina, Miriam Dickinson, Melinda Davis, Rose Gunn, Kris Gowen, Frank DeGruy 3rd, Benjamin Miller, Larry Green. ``Outcomes of Integrated Behavioral Health with Primary Care.'' J Am Board Fam Med. 2017 Mar- Apr;30(2):130-139.doi: 10.3122/jabfm.2017.02.160234. --------------------------------------------------------------------------- As discussed previously in this section, we adopted the coding for the defined set of APCM services described and defined by HCPCS codes G0556, G0557, and G0558 to allow RHCs and FQHCs the ability to simplify the billing and documentation requirements associated with furnishing APCM services (89 FR 98010 through 98012). In addition, and similarly to the discussion in section II.G of this proposed rule, since RHCs and FQHCs that fulfill the requirements to bill for APCM services must comply with requirements that ensure the integrity of the services provided, we believe that these settings should also be able to provide BHI and CoCM with simpler billing and documentation requirements. Therefore, for CY 2026, in alignment with the PFS and goals associated with APCM services, we are proposing to adopt the add-on codes for APCM that would facilitate billing for BHI and CoCM services when RHCs and FQHCs are providing advanced primary care. We believe allowing for the use of these add-on codes would encourage RHCs and FQHCs to provide complementary BHI services, thereby improving access to BHI and CoCM for primary care patients in the RHC and FQHC settings. For further discussion regarding the optional add-on codes, please see section II.G.2 of this proposed rule. In the CY 2025 PFS final rule (89 FR 98010), commenters suggested that we consider unbundling HCPCS code G0512, similarly to what we did with HCPCS code G0511. That is, unbundle the services that comprise HCPCS code G0512 and permit billing of HCPCS codes 99492, 99493, and 99494. Commenters explained that allowing RHCs and FQHCs to report the dedicated CPT codes would support and encourage the adoption of CoCM in these settings. In addition, since we are proposing use of add-on codes for APCM services to facilitate payment of BHI and CoCM services when they are furnished by RHCs and FQHCs providing advanced primary care services, we believe that we would also need to unbundle HCPCS code G0512 to effectuate that policy. RHCs and FQHCs that are furnishing BHI and CoCM as advanced primary care services would not be able to bill for certain other individual CPT codes, such as, 99492, 99493, and 99484. Therefore, we are proposing to require RHCs and FQHCs to report the individual codes that make up the CoCM HCPCS code, G0512 beginning January 1, 2026. Similar to what was finalized in the CY 2025 PFS final rule (89 FR 98000 through 98010) for the general care management HCPCS code G0511, HCPCS code G0512 would no longer be payable when billed by RHCs and FQHCs; instead, RHCs and FQHCs will be required to bill the individual CPT and HCPCS codes that make up HCPCS G0512. The current list of base codes and add-on codes that make up G0512 are listed in Table 34, titled ``Psychiatric Collaborative Care Model HCPCS Codes and Descriptors.'' Payment for these services will be based on the national non-facility PFS payment rate when the individual code is on an RHC or FQHC claim, either alone or with other payable services and the payment rates are updated annually based on the PFS amounts for these codes. We are proposing to revise Sec. 405.2464(c) to reflect our proposal on payment of CoCM services for RHCs and FQHCs. BILLING CODE 4120-01-P [[Page 32550]] [GRAPHIC] [TIFF OMITTED] TP16JY25.104 [[Page 32551]] [GRAPHIC] [TIFF OMITTED] TP16JY25.105 BILLING CODE 4120-01-C c. Payment for Communication Technology-Based Services (CTBS) and Remote Evaluation Services--HCPCS Code G0071 In the CY 2019 PFS final rule (83 FR 59683 through 59688), we established requirements and separate payment for certain CTBS and remote evaluation services in RHCs and FQHCs. Effective January 1, 2019, RHCs and FQHCs are paid for HCPCS code G0071 (Virtual Communication Services), when HCPCS code G0071 is on an RHC or FQHC claim, either alone or with other payable services, and at least 5 minutes of communication technology-based or remote evaluation services are furnished by an RHC or FQHC practitioner to a patient who has had an RHC or FQHC billable visit within the previous year, and the medical discussion or remote evaluation is for a condition not related to an RHC or FQHC service provided within the previous 7 days, and does not lead to an RHC or FQHC visit within the next 24 hours or at the soonest available appointment. At that time, HCPCS code G0071 comprised individual HCPCS codes G2012 (CTBS) and G2010 (remote evaluation services). For respective CTBS code descriptors, please refer to Table 35 in this section. The payment rate for HCPCS G0071 was set at the average of the PFS national non-facility payment rates for HCPCS code G2012 and HCPCS code G2010 for remote evaluation services. (1) Updates to CTBS and Remote Evaluation Services Under the PFS In the CY 2021 PFS final rule (85 FR 84532 through 84533), for practitioners billing under the PFS, we discuss additional policies as they relate to CTBS services. One of which was the establishment of HCPCS code G2250, which allows billing of CTBS by certain non-physician practitioners (NPPs), consistent with the scope of these practitioners' benefit categories, who cannot independently bill for evaluation and management (E/M) services. At the time of the CY 2021 PFS rulemaking we did not address the applicability of [[Page 32552]] G2250 for RHC and FQHC purposes. However, we acknowledge that the code descriptor for HCPCS code G2250 mirrors that of the existing HCPCS code G2010 in that both codes describe the remote assessment of recorded video and/or images submitted by an established patient (for example, store and forward), including interpretation with follow-up with the patient within 24 business hours, not originating from a related service provided within the previous 7 days nor leading to a service or procedure within the next 24 hours or soonest available appointment. Since HCPCS code G2250 describes remote evaluation services similarly to HCPCS code G2010 and certain non-physician practitioners are recognized as RHC and FQHC practitioners, we propose to consider HCPCS code G2250 as billable for separate payment when this service is furnished in an RHC or FQHC. Please see below for more detail on the proposals for CY 2026. In CY 2025 PFS final rule (89 FR 97791 through 97794), for practitioners billing under the PFS, we discuss how the CPT Editorial Panel established new CPT code 98016 describing a brief virtual check- in encounter that is intended to evaluate the need for a more extensive visit (that is, a visit described by one of the office/outpatient E/M codes). We stated that the code descriptor for CPT code 98016 mirrored the existing HCPCS code G2012, which is described as a brief communication technology-based service, for example, 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 to 10 minutes of medical discussion). We further stated that given the similarity between CPT code 98016 and HCPCS code G2012, we finalized the replacement of HCPCS code G2012 with CPT 98016. That is, HCPCS code G2012 was terminated effective December 31, 2024. We inadvertently did not discuss the applicability of this code termination to RHCs and FQHCs; however, given our alignment with the PFS, beginning January 1, 2025 for HCPCS code G0071, CPT code 98016 was used for purposes of computing the payment rate. (2) Proposal for CY 2026 for CTBS and Remote Evaluation Services As we stated previously in section III.B.2.a. of this proposed rule, APCM includes elements of CTBS and remote evaluation services, however in the CY 2025 PFS final rule, we did not address how there are potential duplicative services with APCM and these services for RHCs and FQHCs (89 FR 98010 through 98012). Similarly with unbundling of G0512, we believe that we would also need to unbundle HCPCS code G0071 to better effectuate the payment policy for APCM. RHCs and FQHCs that are furnishing CTBS or remote evaluation services as advanced primary care services would not be able to bill for certain other individual CPT codes, such as, G2010, G2250, and 98016. Therefore, we are proposing to require RHCs and FQHCs to report the individual codes that make up HCPCS code G0071 beginning January 1, 2026. Payment for these services will be based on the national non-facility PFS payment rate when the individual code is on an RHC or FQHC claim, either alone or with other payable services and the payment rates are updated annually based on the PFS amounts for these codes. We are proposing to revise Sec. 405.2464(e) to reflect our proposal for payment of CTBS and remote evaluation services for RHCs and FQHCs. BILLING CODE 4120-01-P [[Page 32553]] [GRAPHIC] [TIFF OMITTED] TP16JY25.106 [[Page 32554]] [GRAPHIC] [TIFF OMITTED] TP16JY25.107 BILLING CODE 4120-01-C d. Aligning With the PFS for Care Coordination Services (1) Background Under the PFS, certain care management/coordination services are categorized as designated care management services and assigned general supervision for purposes of ``incident to'' billing. As we discuss in the CY 2017 PFS final rule (81 FR 80238), generally, we do not believe it is clinically necessary for the individuals on the team who provide these services other than the treating practitioner (namely, clinical staff) to have the treating practitioner immediately available to them at all times, as would be required under a higher level of supervision. We also discussed how the regulations under Sec. 410.26(b), at that time, provided for an exception to assign general supervision to CCM services (and similarly, for the non-face-to-face portion of TCM services), because these are generally non-face-to-face care management/care coordination services that would commonly be provided by clinical staff when the billing practitioner (who is also the supervising practitioner) is not physically present; and the CPT codes comprise solely (or to a significant degree) non-face-to-face services provided by clinical staff (81 FR 80255). For practitioners billing under the PFS, in an effort to better define general supervision and to assign general supervision not only to CCM services and the non-face-to-face portion of TCM services, but also to the then proposed codes., we amended Sec. Sec. 410.26(a)(3) and 410.26(b). We amended Sec. 410.26(a)(3) to better describe general supervision in the context of these services, and amended Sec. 410.26(b) to assign general supervision to ``designated care management services'', stating that we will designate such services through notice and comment rulemaking (81 FR 80255 through 80256). We state at Sec. 410.26(b)(5) that designated care management services can be furnished under general supervision of the physician (or other practitioner) when these services or supplies are provided incident to the services of a physician (or other practitioner). The physician (or other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) who is treating the patient more broadly. However, only the supervising physician (or other practitioner) may bill Medicare for incident to services. Since CY 2017, when new care management/coordination services are proposed under the PFS, we also propose to add the new codes, when applicable, to the list of designated care management services for which we allow general supervision. Each year along with the proposed rule and the final rule we have published the codes for designated care management services assigned general supervision as supporting documentation. For example, for the CY 2025 PFS final rule, the file is titled ``CY 2025 Final Rule List of Designated Care Management Services.'' (2) RHC and FQHC Care Coordination Services As we discuss in section III.B.2.a. of this proposed rule, over the last several years we have been increasing our focus on care coordination. These services have evolved to focus on preventing and managing chronic disease, improving a beneficiary's transition from the hospital to the community setting, or on integrative treatment of patients with behavioral health conditions. Care coordination services are typically non-face-to-face services that do not require the skill level of an RHC or FQHC practitioner. We have acknowledged that the care coordination included in services such as office visits does not always describe adequately the non-face-to-face care management work involved and may not reflect all the services and resources required to furnish comprehensive, coordinated care management for certain categories of beneficiaries. We have noted previously that RHCs and FQHCs cannot bill under the PFS for RHC or FQHC services and individual practitioners working at RHCs and FQHCs cannot bill under the PFS for RHC or FQHC services while working at the RHC or FQHC (80 FR 71081). Therefore, we have proposed payment policies for RHCs and FQHCs that complement the new services for care coordination established under the PFS to align use of the RHC and FQHC resources for those services with a separate payment. Over the last decade, the number of new care coordination services established under the PFS has increased. As these services are proposed, we review and evaluate the new care coordination codes each year as established under the PFS to determine their applicability to RHCs and FQHCs. Our general process is to review the descriptor and policies under the PFS for each new HCPCS code to determine if the services are provided face-to-face with a practitioner or auxiliary personnel with a patient, or have some face-to-face component with a practitioner or auxiliary personnel or are strictly non-face-to-face; that is, the care coordination services are being performed behind the scenes and not in [[Page 32555]] the presence of the patient. If the new care coordination service met the non-face-to-face criteria for RHCs and FQHCs, we would propose in the proposed rule adding it to the list of care coordination services that can be paid separately from a billable visit for RHCs and FQHCs. For a detailed history on the payment for care coordination services, please see section III.B.2. of the CY 2025 PFS final rule (89 FR 97998 through 98010). The increase in frequency of this complementary rulemaking has prompted us consider operational efficiencies that we believe could result in more transparency and clarity in determining applicable care coordination services for RHCs and FQHCs. In the CY 2025 PFS final rule (89 FR 98012), we solicited comment on how we can improve the transparency regarding which HCPCS codes are considered care coordination services. Our goal is to classify care coordination services established under the PFS that extend to RHCs and FQHCs. We stated that we believe establishing a streamlined policy regarding which services are separately paid for RHCs and FQHCs versus which services are included as part of the visit creates transparency. In addition, we believe establishing a policy where codes are communicated and updated through subregulatory guidance such as manuals, website pages, and change requests may be more efficient. Only a few commenters responded to our request for information on how we can improve transparency and predictability regarding which HCPCS codes are considered care coordination services. These commenters agreed with a streamlined approach and that communicating these updates through sub-regulatory guidance would be more transparent and efficient. Commenters stated that by distinguishing services that are separately payable from those services included in a visit, we would provide RHCs and FQHCs the clarity needed to accurately submit claims for Medicare reimbursement. In response to the comment solicitation, we propose adopting services that are established and paid under the PFS and designated as care management services as care coordination services for purposes of separate payment for RHCs and FQHCs. We believe this proposal would improve transparency and efficiency for RHCs and FQHCs since these services and their designation as care management services go through notice and comment rulemaking. In addition, as discussed under Sec. Sec. 405.2413 and 405.2415, service and supplies furnished incident to TCM and care coordination services can be furnished under general supervision. As discussed previously in this section, under the PFS, when new care management/coordination services are proposed under the PFS, we also propose to add the new codes, when applicable, to the list of designated care management services for which we allow general supervision. Each year, along with the proposed rule and the final rule, we have published the codes for designated care management services assigned general supervision as supporting documentation. For example, for the CY 2025 PFS final rule, the file is titled ``CY 2025 Final Rule List of Designated Care Management Services.'' Under our proposal, services designated as care management services and added to the list of designated care management services could also be furnished in RHCs and FQHCs and paid separately as described in Sec. 405.2464(c). Interested parties can look for opportunities to review and comment on new services in the respective sections of the PFS proposed and final rules. When services are finalized under the PFS, we propose to update RHC and FQHC sub-regulatory guidance to reflect the new care coordination services. We expect that this will occur, that is, we would adopt any new care management services that are proposed and finalized in the CY 2027 PFS rule and displayed on the list of the designated care management services to be care coordination services for RHCs and FQHCs. Any new care coordination HCPCS codes will be paid separately from the RHC AIR methodology or FQHC PPS at the national non-facility PFS payment rate, either alone or with other payable visits. We note that some of the current RHC and FQHC care coordination services are not listed on the current list of designated care management service, however, we will continue to make separate payments for these RHC and FQHC care coordination services as they have been previously adopted through notice and comment rulemaking. These services include CCM, PCM, BHI, CPM, RPM, RTM, CHI, PIN and PIN-peer support services, and APCM. We seek comment on whether the proposed process to align with the care coordination services paid under the PFS as care management services is sustainable moving forward or is there a more effective approach for adopting new care coordination codes established under the PFS as care management codes that would improve transparency and efficiency for RHCs and FQHCs.

3. Services Using Telecommunications Technology

a. Background Section 3704 of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) (Pub. L. 116-136, March 27, 2020) directed the Secretary to establish payment for RHC and FQHC services that are provided as Medicare telehealth services by RHCs and FQHCs serving as a distant site (that is, where the practitioner is located) during the PHE for COVID-19. Separately, section 3703 of the CARES Act expanded CMS' emergency waiver authority to allow for a waiver of any of the statutory telehealth payment requirements under section 1834(m) of the Act for telehealth services furnished during the PHE. Specifically, section 1834(m)(8)(B) of the Act, as added by section 3704 of the CARES Act, required that the Secretary develop and implement payment methods for FQHCs and RHCs that serve as a distant site during the PHE for the COVID-19 pandemic. The payment methodology outlined in the CARES Act requires that rates shall be based on rates that are similar to the national average payment rates for comparable telehealth services under the Medicare PFS. We established payment rates for these services furnished by RHCs and FQHCs based on the average PFS payment amount for all Medicare telehealth services, weighted by volume in a Special Edition Medicare Learning Network Article (SE20016). We subsequently finalized a policy to extend use of this payment methodology for these services through CY2025. Section 303 of the Consolidated Appropriations Acs (CAA), 2022, section 4113(c) of CAA, 2023, section 3207(c) of the American Relief Act, 2025, and section 2207(c) of the Full-Year Continuing Appropriations and Extensions Act, 2025 each subsequently extended these flexibilities. Most recently, section 2207(c) of the Full-Year Continuing Appropriations and Extensions Act, 2025 amended section 1834(m)(8) of the Act to continue payment for RHC and FQHC services as Medicare telehealth services through September 30, 2025. In addition to the statutory and associated rulemaking changes noted previously, we established various flexibilities related to use of telecommunications technology through rulemaking; for example, in the CY 2022 PFS final rule with comment period (86 FR 65211), we revised the regulatory requirement that an RHC or FQHC mental health visit must be a face-to-face (that is, in-person) encounter between an RHC or FQHC patient and [[Page 32556]] an RHC or FQHC practitioner, and we revised the regulations under Sec. 405.2463 to state that an RHC or FQHC mental health visit can also include encounters furnished through interactive, real-time, audio/ video telecommunications technology or audio-only interactions in cases where beneficiaries are not capable of, or do not consent to, the use of devices that permit a two-way, audio/video interaction for the purposes of diagnosis, evaluation or treatment of a mental health disorder. We also revised Sec. 405.2469, to add a supplemental wraparound payment to be made to the FQHC when a covered face-to-face (that is, in-person) encounter or an encounter where services are furnished using interactive, real-time, telecommunications technology or audio-only interactions in cases where beneficiaries do not wish to use or do not have access to devices that permit a two-way, audio/video interaction for the purposes of diagnosis, evaluation or treatment of a mental health disorder occurs between a MA enrollee and a practitioner as set forth in Sec. 405.2463. We noted that these changes aligned with similar changes for Medicare telehealth services for behavioral health paid under the PFS. We also noted that this change would allow RHCs and FQHCs to report and be paid for mental health visits furnished via real-time, telecommunication technology in the same way they currently do when these services are furnished in-person. In addition, in the CY 2022 PFS final rule (86 FR 65210 and 65211), we revised the regulations at Sec. Sec. 405.2463 and 405.2469 to state that there must be an in-person mental health service furnished within 6 months prior to the furnishing of the telecommunications service and that an in-person mental health service (without the use of telecommunications technology) must be provided at least every 12 months while the beneficiary is receiving services furnished via telecommunications technology for diagnosis, evaluation, or treatment of mental health disorders, unless, for a particular 12-month period, the physician or practitioner and patient agree that the risks and burdens outweigh the benefits associated with furnishing the in-person item or service, and the practitioner documents the reasons for this decision in the patient's medical record. In the CY 2025 PFS final rule, we announced that we would continue to delay the in-person visit requirement for mental health services furnished via communication technology by RHCs and FQHCs to beneficiaries in their homes until January 1, 2026. However, subsequent to the publication of the CY 2025 PFS final rule, section 2207(d) of the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119-4, March 15, 2025) legislated the in-person visit requirement for mental health visits following September 30, 2025; we are implementing conforming regulatory changes as discussed in section III.B.3.d. of this proposed rule. As an additional regulatory flexibility, in the CY 2025 PFS final rule (89 FR 98013 through 98017), we extended our policy to deem the presence of the physician (or other practitioner) to include virtual presence for the purposes of direct supervision through audio/video real-time communications technology (excluding audio-only) through December 31, 2025. b. Direct Supervision via Use of Two-Way Audio/Video Communications Technology Under Medicare Part B, certain types of services are required to be furnished under specific minimum levels of supervision by a physician or practitioner. See section II.D.2 of this proposed rule for the discussion regarding direct supervision for services provided using telecommunications technologies under the PFS. In the CY 2024 PFS final rule (88 FR 79067), we explained that extending this definition of direct supervision for RHCs and FQHCs under our regulations at Sec. Sec. 405.2413, 405.2415, 405.2448, and 405.2452 through December 31, 2024, would align the timeframe of this policy with many of the previously discussed PHE-related telehealth policies that were extended under provisions of the CAA, 2023. In addition, we were concerned about an abrupt transition to the pre-PHE policy of requiring the physical presence of the supervising practitioner beginning after December 31, 2024, given that RHCs and FQHCs have established new patterns of practice during the PHE for COVID-19. We also believed that RHCs and FQHCs would need time to reorganize their practices established during the PHE to reimplement the pre-PHE approach to direct supervision without the use of audio/ video technology. Similar to services furnished in physician office setting, RHC and FQHC services and supplies furnished incident to physician's services are limited to situations in which there is direct physician supervision of the person performing the service, except for certain care coordination services which may be furnished under general supervision. For CY 2024 we continued to define ``immediate availability'' as including real-time audio and visual interactive telecommunications through December 31, 2024, and solicited comment on whether we should consider extending the definition of ``direct supervision'' to permit virtual presence beyond December 31, 2024; specifically, we solicited comment on potential patient safety or quality concerns when direct supervision occurs virtually in RHCs and FQHCs; for instance, if certain types of services are more or less likely to present patient safety concerns, or if this flexibility would be more appropriate when certain types of auxiliary personnel are performing the supervised service. We were also interested in potential program integrity concerns such as overutilization or fraud and abuse that interested parties may have had in regard to this policy. In the CY 2025 final rule, (89 FR 98015) we finalized our policy to maintain the virtual presence flexibility on a temporary basis, that is, the presence of the physician (or other practitioner) would include virtual presence through audio/video real-time communications technology (excluding audio-only) through December 31, 2025 as such a policy continues to support access and preserve workforce capacity. (1) Proposal for CY 2026 Regarding Direct Supervision in RHCs/FQHCs We have considered information from interested parties, particularly in response to the CY 2024 PFS proposed rule where we solicited comment on potential patient safety or quality concerns when direct supervision occurs virtually in RHCs and FQHCs; for instance, if certain types of services are more or less likely to present patient safety concerns, or if this flexibility would be more appropriate when certain types of auxiliary personnel are performing the supervised service. We were also interested in potential program integrity concerns such as overutilization or fraud and abuse that interested parties may have regarding this policy. As discussed in the CY 2025 final rule (89 FR 98014 through 98015), in response to our proposal to extend this definition through the end of 2025, commenters strongly supported the proposal to allow virtual direct supervision through real-time audio/video communications technology in RHCs and FQHCs, citing benefits such as reduced inefficiencies, improved accessibility, better alignment with other outpatient providers, and enhanced healthcare delivery without compromising patient safety or program integrity. [[Page 32557]] Given the information presented by interested parties on safety and effectiveness, we think direct supervision provided via two-way real time audio-video telecommunications technology meets the statutory requirements specific to RHCs and FQHCs at section 1861(aa)(2)(B) of the Act regarding necessary physician supervision and guidance. We note that in section II.D.2 of this proposed rule, we propose to permanently adopt a definition of direct supervision that allows ``immediate availability'' of the supervising practitioner using audio/video real- time communications technology (excluding audio-only), for all services described under Sec. 410.26, except for services that have global surgery indicators of, 010, or 090. These indicators are defined in IOM Pub. 100-04, chapter 23, section 50.6 as 010 ``Minor procedure with preoperative relative values on the day of the procedure and postoperative relative values during a 10-day postoperative period included in the fee schedule amount; evaluation and management services on the day of the procedure and during this 10-day postoperative period generally not payable'' and 090 ``Major surgery with a 1-day preoperative period and 90-day postoperative period included in the fee schedule payment amount''. These are services that describe a surgical service as well as its post-operative period of either 10 days, or 90 days, respectively. In the interests of aligning our approach toward direct supervision for RHCs and FQHCs with that discussed in section II.D.2. of this proposed rule, we believe that we should permanently adopt this flexibility in RHCs and FQHCs as it continues to support access and preserve workforce capacity. However, as we discuss in IOM Pub. 100-02, chapter 13, section 40.4, the Medicare global billing requirements do not apply to RHCs and FQHCs, and global billing codes are not accepted for RHC or FQHC billing or payment. Since services that have global surgery indicators are not applicable in the RHC and FQHC settings, we are proposing revisions at Sec. 405.2401(b) to define ``Direct Supervision'' to mean that the physician (or other supervising practitioner) must be present in the RHC or FQHC and immediately available to furnish assistance and direction throughout the performance of the service. It does not mean that the physician (or other supervising practitioner) must be present in the room when the service is performed. The presence of the physician (or other practitioner) includes virtual presence through audio/video real-time communications technology (excluding audio-only). c. Payment for Medical Visits Furnished via Telecommunications Technology Widespread use of telecommunications technology to furnish services during the PHE has illustrated interest within the medical community and among Medicare beneficiaries in furnishing and receiving care through the use of technology beyond the PHE. During the PHE, RHCs and FQHCs, much like other health care providers, had to change how they furnish care to meet the needs of their patients. RHCs and FQHCs heavily utilized the temporary authority to be paid for their services when provided as Medicare telehealth services during the PHE. Eliminating flexibilities under which RHC and FQHC services have been furnished to beneficiaries via telecommunications technology for over 5 years and resuming payment solely for in-person, face-to-face medical visits, would cause disruptions in access to services from RHC and FQHC practitioners. This would be particularly problematic for the underserved populations that these settings furnish services to since it could fragment care. We believe that we need to preserve the flexibilities under which RHC and FQHC services have been furnished to beneficiaries via telecommunications technology temporarily and to do so through an approach that these settings are familiar with to mitigate burden while we consider how to incorporate services furnished through telecommunications technology on a more permanent basis. For these reasons, in the event that Congress no longer authorizes payment to be made for telehealth services furnished via a telecommunications system by RHCs and FQHCs using a payment methodology based upon payment rates that are similar to the national average payment rates for comparable telehealth services under the PFS, we are proposing, on a temporary basis, to facilitate payment for non- behavioral health visits (hereafter referred to in this discussion as ``medical visit services'') furnished via telecommunications technology using an approach that closely aligns with this methodology. Like the methodology we used during and after the PHE, RHCs and FQHCs would continue to bill for RHC and FQHC medical visit services furnished using telecommunications technology, including services furnished using audio-only communications technology, by reporting HCPCS code G2025 on the claim. Since the costs associated with medical visit services furnished via telecommunications technology are not included in the calculations for the RHC AIR methodology and FQHC PPS, we believe, similar to the methodology described in section 1834(m)(8) of the Act, that we need to propose a proxy that would represent such resources used when furnishing these services. Therefore, we propose to continue to calculate the payment amount for these services billed using HCPCS code G2025 based on the average amount for all Medicare telehealth services paid under the PFS, weighted by volume for those services reported under the PFS. We believe that continuing to use this weighted average is appropriate during this interim period while we contemplate permanent policies for these services since there is a wide range of payment rates for the Medicare telehealth services paid under the PFS. As discussed in the CY 2025 final rule (89 FR 98015 through 98016), we believe that RHCs and FQHCs generally furnish services that are similar to and at a frequency the same as physicians and other practitioners paid under the PFS. While we do not have actual cost information, we believe that this weighted average is an appropriate proxy since it addresses certain resource costs experienced by professionals and would mitigate any potential over or under payments. Costs associated with these services would continue to not be used in determining payments under the RHC AIR methodology or the FQHC PPS. We believe that the proposed approach would preserve the telecommunication technology flexibility under which RHC and FQHC services have been furnished for over 5 years and would not impact access to care for Medicare beneficiaries who currently benefit from these services while CMS contemplates next steps. We note that this is a stopgap approach to preserve access concerns temporarily. The same rationale that led us to propose and finalize this policy last year applies again now given that congress has again extended this flexibility following publication of last year's final rule; we beleive that our regulatory approach toward inclusion of these services furnished via telecommunications technology will continue to apply after the end of the statutory requirement that they be included. In addition, we believe that continuing this payment methodology on a temporary basis through December 31, 2026 would provide flexibility to respond to any future statutory changes. [[Page 32558]] (1) Alternative Proposal Considered for Payment of Medical Visits Furnished via Telecommunication Technology We considered reevaluating the regulations regarding face-to-face visit requirements for encounters between a beneficiary and an RHC or FQHC practitioner in light of contemporary medical practices. That is, we considered proposing a revision to the regulatory requirement that an RHC or FQHC medical visit must be a face-to-face (that is, in- person) encounter between a beneficiary and an RHC or FQHC practitioner to also include encounters furnished through interactive, real-time, audio and video telecommunications technology. This would result in payment for services furnished via telecommunication technology to be made under the RHC AIR methodology and under the FQHC PPS, similar to how we revised the regulations for mental health visits. We believe interested parties may prefer the per visit payment that aligns with the RHC AIR or FQHC PPS. However, we did not propose this alternative because we determined that it would have unintended consequences, especially in cases where the RHC AIR or FQHC PPS per-visit rates would be significantly higher than the PFS rate that would apply if other entities furnished the same service to the same beneficiary in the same location. We believe that continuing to pay temporarily for RHC and FQHC services furnished via telecommunication technologies in the same manner as we have done over the past several years preserves the flexibility for RHCs and FQHCs to continue access to care, mitigates administrative burden, and mitigates potential program integrity concerns. However, we are soliciting comment on the alternative proposal we considered. That is, revising the definition of a visit to include interactive, real-time, audio/video telecommunication technology which would result in a capitated payment under the RHC AIR methodology or FQHC PPS. d. Proposal for Conforming Regulatory Text Changes Subsequent to the publication of the CY 2025 PFS final rule, section 2207(d) of the Full-Year Continuing Appropriations and Extensions Act, 2025 amended sections 1834(y)(2) and 1834(o)(4)(B) of the Act by extending the delay of in-person requirements for mental health services furnished through telecommunication technology for RHCs and FQHCs, respectively, through September 30, 2025. We are therefore proposing to make conforming regulatory text changes based to the applicable RHC and FQHC regulations in 42 CFR part 405, subpart X, specifically, at Sec. 405.2463, ``What constitutes a visit,'' we propose to amend paragraph (b)(3) and, at Sec. 405.2469 ``FQHC supplemental payments,'' we propose to amend paragraph (d). Both of these provisions would require that, beginning October 1, 2025, there must be an in-person mental health service furnished within 6 months prior to the furnishing of the telecommunications service and that an in-person mental health service (without the use of telecommunications technology) must be provided at least every 12 months while the beneficiary is receiving services furnished via telecommunications technology for diagnosis, evaluation, or treatment of mental health disorders, unless, for a particular 12-month period, the physician or practitioner and patient agree that the risks and burdens outweigh the benefits associated with furnishing the in-person item or service, and the practitioner documents the reasons for this decision in the patient's medical record.

1. Overview of Proposed Ambulatory Specialty Model

a. Introduction Under the authority of the Center for Medicare and Medicaid Innovation (Innovation Center) in section 1115A(b) of the Act, we are proposing the implementation and testing of the Ambulatory Specialty Model (ASM), a new mandatory alternative payment model with 5 performance years that would begin January 1, 2027 and end December 31, 2031. ASM would test whether adjusting payment for specialists based on their performance on targeted measures of quality, cost, care coordination, and meaningful use of certified electronic health record (EHR) technology (CEHRT) results in enhanced quality of care and reduced costs through more effective upstream chronic condition management. To enhance quality of care and lower the costs of care, ASM would be established as a mandatory model focused on the care provided by select specialists to Medicare beneficiaries with the chronic conditions of heart failure and low back pain. Under the model, clinicians would be required to report a select set of measures and activities clinically relevant to their specialty type and the chronic condition of interest. These measures and activities would assess quality, cost, interoperability, and care coordination practices, all of which are necessary for effective upstream chronic condition management. To incentivize improvements in quality and care coordination, CMS would assess the clinician's performance on those measures and activities relative to their peers, who are also participants of the model and of a similar specialty type treating the same chronic condition. ASM falls within a larger framework of activities initiated by the Innovation Center to focus on high-volume, high-cost chronic conditions and direct engagement of specialists in value-based payment. The Innovation Center recently announced its new strategy based on three strategic pillars for improving the health of Americans and protecting taxpayers: preventing disease through evidence-based practices, empowering people with information to make better decisions, and driving choice and competition.\115\ --------------------------------------------------------------------------- \115\ CMS Innovation Center, CMS Innovation Center 2025 Strategy to Make America Healthy Again, May 2025. https://www.cms.gov/ priorities/innovation/about/strategic- direction#:~:text=Three%2DPronged%20Approach,served%20by%20the%20Inno vation%20Center. --------------------------------------------------------------------------- In line with the updated Innovation Center principles, this proposed rule proposes a new mandatory model that would improve beneficiary and provider engagement, incentivize preventive care, and increase financial accountability for certain specialists. The model would build upon lessons learned from previous Innovation Center models and the Merit-based Incentive Payment System (MIPS) under the Quality Payment Program. We believe the model would answer the call to create a more cohesive and efficient health system that enhances the quality of care and reduces costs over time. To promote preventive care, the model would incentivize specialists who are ASM participants to ensure that their patients have a regular source of primary care and are screened to help identify risks and early signs of chronic conditions. This model would also seek to prevent deterioration of and complications associated with established chronic conditions. To empower patients, the model would promote direct accountability for quality. By featuring patient-reported outcome measures in the proposed quality ASM performance category, this model encourages patients to report their improvement or decline in function, which directly impacts clinician payment and further incentivizes clinicians to incorporate patient voice and experience in clinical care decisions. We believe a focus on [[Page 32559]] patient-reported measures elevates patient voice, leading clinicians to be more responsive to the patient's response to treatment, while also addressing the significant spending that results from functional impairment. These measures also provide a pathway for clinicians to have conversations about non-medical, lifestyle-based interventions with their patients. This proposed model is intent on removing the onus from patients to act as the go-between among clinicians they see for their care by incentivizing clinicians to coordinate care for their patients more seamlessly. Patients would be able to focus on solutions to their health, rather than resolving information and guidance they have received from multiple clinicians. Finally, the model would require the participation of individual clinicians rather than organizations to encourage competition and create a level playing field for solo and small practices. By evaluating clinicians individually, ASM removes the unequal reporting and scoring benefits that have been previously afforded to consolidated health systems and group practices. This form of mandatory participation would bring transparency, accountability, and comparability at the clinician-level, helping to identify clinicians within large, consolidated health systems or provider networks providing low-value care. Low-value care refers to services that: (1) may offer limited or no clinical benefit to a patient; or (2) may present risks of harm that outweigh the potential benefit. By requiring the participation of individual clinicians, we believe this model would reduce spending that represents low-value services and major cost-drivers for heart failure and low back pain (for example, unnecessary imaging, surgeries, hospital admissions). Ultimately, this model aims to drive competition among similar specialists with a targeted assessment of their performance relative to their peers in the treatment of a specific chronic condition and protect taxpayers by reducing low-value services by holding specialists accountable for the cost of services clinically related to their role in managing care. We have designed ASM with a focus on clinicians who commonly treat patients in the ambulatory setting, develop longitudinal relationships with patients, and co-manage beneficiaries with primary care clinicians. In addition, we considered those who treat chronic conditions that are likely to benefit from improved integration between specialty and primary care to maximize opportunities for incentivizing high-value care and tertiary prevention. Specifically, we propose to focus the model on the chronic conditions of heart failure and low back pain, as they have previously established episode-based cost measures (EBCMs) specified for the MIPS cost performance category. The EBCMs were developed with specialists and stakeholders through an extensive, collaborative process that, by design, focused on conditions with a large share of Medicare spending, a high number of responsible clinicians, and opportunities for care improvement. Based on recent estimates, heart failure and low back pain, in particular, account for 3.5 and 2.7 percent total Medicare Part A and B spending.\116\ These are significantly higher than other chronic conditions with EBCMs, which account for less than one percent of Medicare Part A and B spending, except for diabetes, which accounts for 4.2 percent of spending.\117\ In contrast, many Medicare beneficiaries with type 2 diabetes are capably managed by primary care physicians as the quarterback of their care with input from consulting specialists. Consequently, we do not believe it would be an appropriate chronic condition for this specialty care model. --------------------------------------------------------------------------- \116\ Quality Payment Program, 2025 Summary of Cost Measures, December 2024. https://qpp-cm-prod-content.s3.amazonaws.com/uploads/3129/2025-mips-summary-cost-measures.pdf. \117\ Ibid. --------------------------------------------------------------------------- ASM would be a mandatory model that begins on January 1, 2027 and ends December, 31, 2033. There would be 5 performance years, beginning January 1, 2027 and ending December 31, 2031. Final data submission of measures and activities would be in CY 2032, with final model payment adjustments in CY 2033. To measure clinician performance in ASM, we would establish a mandatory set of measures and activities for physicians that meet the proposed ASM participant eligibility criteria described in section III.C.2.c.(3). of this proposed rule. ASM aims to assess the performance of ASM participants providing care for Medicare beneficiaries with the targeted chronic conditions at the individual clinician level. Specifically, ASM would test whether adjusting Medicare Part B payments for covered professional services based on measures of quality, cost, care coordination, and CEHRT results in enhanced quality of care and reduced costs through more effective upstream chronic condition management. ASM would leverage components of the existing MIPS Value Pathway (MVP) framework, as appropriate, to meaningfully engage specialists in improving the quality of care for high-volume, high-cost chronic conditions and better integrate specialists in primary care. MVPs are one MIPS reporting option that provides a smaller set of measures to choose from that are most relevant to a condition or specialty. Currently, for MIPS, CMS assesses the performance of each MIPS eligible clinician on measures and activities CMS has specified for a CY performance period/MIPS payment year for four performance categories: quality, cost, clinical practice improvement activities, and meaningful use of CEHRT (referred to as ``Promoting Interoperability''). In accordance with section 1848(q) of the Act, CMS calculates a composite performance score (a ``final score'' as defined at Sec. 414.1305) from 0 to 100 points for each MIPS eligible clinician. Then, CMS compares each MIPS eligible clinician's final score to the performance threshold established in prior rulemaking for that CY performance period/MIPS payment year to calculate the MIPS payment adjustment factor as specified in section 1848(q)(6) of the Act. For the applicable MIPS payment year, CMS would calculate and apply to each MIPS eligible clinician: (1) a positive adjustment, if their final score exceeds the performance threshold; (2) a neutral adjustment, if their final score meets the performance threshold; or (3) a negative adjustment, if their final score is below the performance threshold. In calculating the MIPS payment adjustment factor for each MIPS eligible clinician, CMS accounts for scaling factor and budget neutrality requirements, as further specified in section 1848(q)(6) of the Act. By applying these budget neutrality and scaling factor requirements, CMS's calculations of positive MIPS payment adjustment factors for each MIPS eligible clinician are limited by CMS's calculations of negative MIPS payment factors for each MIPS eligible clinician. In other words, CMS's estimated amounts of positive MIPS payment adjustment factors for MIPS eligible clinicians performing above the performance threshold must be offset by CMS's estimated amounts of negative MIPS payment adjustment factors for MIPS eligible clinicians performing below the performance threshold. In MVPs, however, clinicians still have flexibility to select which measures to report. Under MIPS, a clinician's performance is assessed against all MIPS clinicians, regardless of reporting [[Page 32560]] option, specialty type, or the services they provide. As CMS discussed in a 2024 Request for Information (RFI) (89 FR 61596),\118\ we expect that a more targeted approach where clinicians are evaluated: (1) on required reporting of a set of relevant performance measures; and (2) among clinicians furnishing similar sets of services, would produce scores and subsequent payment adjustments that are more reflective of clinician performance. A more targeted approach to measurement would also offer more insight into how clinical decisions and processes, such as care coordination, affect patient outcomes. This targeted approach would include reporting or required collection of patient-reported outcome measures that assess the change in a beneficiary's functional status over the course of the episode, ensuring clinicians prioritize the same goals as their patients. Furthermore, equipped with more specialty-relevant performance information, we expect clinicians would be more likely to invest resources in pursuit of better outcomes and improved care coordination, ultimately resulting in better care for patients. To test this more targeted approach, this proposed mandatory model leverages the existing MVP policies, deviating from MVP policies in specific ways, as applicable. --------------------------------------------------------------------------- \118\ Medicare and Medicaid Programs; CY 2025 Payment Policies Under the Medicare Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare Overpayments. --------------------------------------------------------------------------- First, unlike the voluntary measure and activity selection permitted under the MVP reporting option, ASM would require clinicians to report on a set of measures and activities clinically relevant to their specialty type and the chronic condition. of interest. This would ensure a more analogous comparison between clinicians. Second, while clinicians reporting under MVPs are scored against the entire pool of MIPS clinicians, ASM would assess performance against only those clinicians treating the same chronic condition. Each clinician would receive a performance score based on the measures and activities included in the four ASM performance categories (which are based on the MIPS performance categories)--quality, cost, improvement activities, and Promoting Interoperability. In section III.C.2.d. of this proposed rule, we describe the proposed requirements in the quality, cost, improvement activities, and Promoting Interoperability ASM performance categories. Third, we would use a different approach, compared to MVPs, for aggregating the ASM performance categories to calculate a final score and determine the ASM payment adjustment. This approach would broaden the distribution of final scores and increase the magnitude of payment adjustments, which we believe would incentivize performance improvements that would lead to more effective upstream chronic condition management. We refer readers to the CY 2022 PFS final rule for additional details on the MVP performance category weighting Sec. 414.1365(e). As described in section III.C.2.e. of this proposed rule, we would focus on value and variation in clinician performance by primarily measuring performance on quality and cost performance categories for calculating the ASM final score. We also understand the importance of the improvement activities and Promoting Interoperability performance categories and would apply potential negative scoring adjustments for non-reporting or poor performance. We are also considering additional positive scoring adjustments for clinicians in small practices participating in the model and for ASM participants treating a large proportion of medically complex patients. We refer readers to sections III.C.2.c., III.C.2.d., and III.C.2.e. of this proposed rule for additional details on the proposed policies related to ASM participant eligibility criteria, the quality, cost, improvement activities, and Promoting Interoperability ASM performance categories, and ASM final scoring calculations. To ensure savings in the financial impacts for the model, ASM would also retain a percentage of the payments rather than distributing all funds as clinicians' payment adjustments. ASM participants would receive neutral, negative, or positive payment adjustments on future Medicare Part B payments for covered professional services based on their performance during an ASM performance year. As is done under MIPS, clinicians participating in ASM would continue to bill Medicare under the traditional FFS system for services furnished to Medicare FFS beneficiaries. MIPS eligibility criteria described under 42 CFR 414.1305 are not factored into the ASM participant eligibility criteria described in section III.C.2.c.(3). of this proposed rule. However, MIPS eligible clinicians participating in this model would be exempt from MIPS reporting requirements for any ASM performance year that they are included in ASM. b. Background Health care is becoming more fragmented as Medicare beneficiaries are increasingly seeing a greater number of specialists on a more regular basis. At the same time, the volume of primary care visits has remained relatively constant.119 120 Primary care teams must now coordinate with more specialists than ever before,\121\ despite persistent barriers to specialist access for certain patients.122 123 We believe there are opportunities to improve coordination between specialists and primary care providers (PCPs) and increase beneficiary engagement in care decisions, particularly with respect to preventing the onset and progression of disease. --------------------------------------------------------------------------- \119\ Barnett ML, Bitton A, Souza J, Landon BE. Trends in Outpatient Care for Medicare Beneficiaries and Implications for Primary Care, 2000 to 2019 [published correction appears in Ann Intern Med. 2022 Oct;175(10):1492]. Ann Intern Med. 2021;174(12):1658-1665. doi:10.7326/M21-1523. \120\ Lori Timmins, PhD, Carol Urato, MA, Lisa M. Kern, MD, MPH, Arkadipta Ghosh, PhD, Eugene Rich, MD. Primary Care Redesign and Care Fragmentation Among Medicare Beneficiaries. The American Journal of Managed Care, March 2022, Volume 28, Issue 3. \121\ The CMS Innovation Center's strategy to support person- centered, value-based specialty care. 2022. Retrieved from https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care. \122\ McConnell KJ, Charlesworth CJ, Zhu JM, Meath THA, George RM, Davis MM, Saha S, Kim H. Access to Primary, Mental Health, and Specialty Care: A Comparison of Medicaid and Commercially Insured Populations in Oregon. J Gen Intern Med. 2020 Jan;35(1):247-254. doi: 10.1007/s11606-019-05439-z. Epub 2019 Oct 28. PMID: 31659659; PMCID: PMC6957609. \123\ Romaire MA, Haber SG, Wensky SG, McCall N. Primary care and specialty providers: an assessment of continuity of care, utilization, and expenditures. Med Care. 2014;52(12):1042-1049. doi:10.1097/MLR.0000000000000246. --------------------------------------------------------------------------- Although the Innovation Center has tested models that address the integration of primary and specialty care for chronic conditions that may benefit from greater collaboration and create opportunities for preventive care, these models have been largely focused on behaviors and practice patterns in primary care.\124\ This proposed model test elects to focus on the behaviors and practice patterns in specialty care for those treating chronic conditions and would be the first Innovation Center [[Page 32561]] model to use the MVP framework as the foundation for a model test. --------------------------------------------------------------------------- \124\ See the evaluation reports of the Comprehensive Primary Care Plus (CPC+) model, which ran from 2017 to 2021, https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus. See also the evaluation reports of the Primary Care First (PCF) model, which began in 2021 and will end December 31, 2025, https://www.cms.gov/priorities/innovation/innovation-models/primary-care-first-model-options. --------------------------------------------------------------------------- We believe the MVP framework has many benefits. First, the MVP framework advances value-based care by narrowing the available measure set based upon clinician specialty, medical condition, or patient population, which allows for meaningful comparisons to be made across providers and relevant feedback to be available to participants on their performance, strengthening the foundation for accountability in specialty care. The MVPs utilize a cohesive set of measures and activities focused on performance in rendering care for a particular specialty or clinical condition. Second, we believe that meaningful comparisons of performance combined with a payment methodology that includes more significant Medicare Part B payment adjustments, would encourage meaningful specialty care engagement with primary care clinicians to both prevent and manage the onset of chronic conditions. Third, we intend to test ASM's more targeted approach to performance assessment, as described in the introduction section of this proposed rule, so it may provide a foundation to potentially expand this approach to other specialist cohorts treating other chronic conditions. While there are 21 MVPs for the CY 2025 performance period/2027 MIPS payment year spanning numerous specialties, CMS has a goal of creating additional MVPs relevant to the practices of 80 percent of MIPS eligible clinicians. The MVP reporting option, with its focused set of measures and activities aligned around specific specialties or conditions, provides a framework for applying ASM's targeted approach to other specialist cohorts treating other chronic conditions. Using an existing framework that is agnostic to specialty type, as opposed to creating multiple unique models that are each narrowly defined by a condition or specialty, would allow the Innovation Center to take a more inclusive and unified approach to increasing specialist engagement in value-based payment. Using MVPs as a framework to test a chronic condition model, ASM would increase the number of specialists in value-based care arrangements and hold them accountable for ensuring beneficiaries have a regular source of primary care. Through required improvement activities and measures, the model would also encourage specialty care providers to actively engage with both beneficiaries and PCPs to improve care transitions and make certain their patients are receiving preventive care, such as screening for obesity and depression. When primary and specialty care providers collaborate across care settings, together they can deliver accountable care that best meets patients' needs and preferences.

2. Provisions of Proposed Ambulatory Specialty Model

a. Definitions We propose at 42 CFR 512.705 to define certain terms for ASM. We describe these proposed definitions in context throughout section III.C.2 of this proposed rule. We propose to codify the definitions and policies of ASM at 42 CFR part 512 subpart G (proposed Sec. 512.705 through Sec. 512.780). In addition, we propose that the definitions contained in the standard provisions for mandatory Innovation Center models at subpart A of part 512 would also apply to ASM, unless expressly stated otherwise in the proposed policies set forth at Sec. 512.705 through Sec. 512.780. We seek comments on these proposed definitions for ASM. b. Proposed Length of Model Test We propose at Sec. 512.705 to define the ``ASM test period'' as the 7-year period from January 1, 2027, to December 31, 2033, that includes all ASM performance years and ASM payment years as described in Table 36. We propose at Sec. 512.705 to define ``ASM performance year'' as a 12-month period beginning on January 1 and ending on December 31 of each year during the first 5 calendar years of ASM test period. We propose at Sec. 512.705 to define an ``ASM payment year'' as a calendar year in which CMS applies the ASM payment multiplier to Medicare Part B payments based on the final score achieved by that ASM participant for the ASM performance year 2 years prior. Like MIPS, we propose that an ASM payment year occurs 2 calendar years following the ASM performance year that determines the ASM participant's final score that then determines their payment adjustment factor applied in that ASM payment year. For instance, the CY 2027 ASM performance year would correspond to the CY 2029 ASM payment year to allow time for ASM participants to submit required data for each of the ASM performance categories as described in section III.C.2.d of this proposed rule and for CMS to score submitted data for the ASM performance categories, calculate final scores, and determine payment adjustments as discussed in sections III.C.2.d., III.C.2.e, and III.C.2.f of proposed rule. Final data submission of measures and activities would be in CY 2032, with final model payment adjustments in CY 2033. This timeline aligns with MIPS in that those who report traditional MIPS or MVPs receive an adjustment to their Medicare Part B fee-for-service payments 2 years after the corresponding MIPS performance period based on a total score calculated from reported measures and activities across the MIPS performance categories (see Sec. Sec. 414.1305, 414.1320, 414.1365, and 414.1405(e)). We believe 5 ASM performance years followed by 5 ASM payment years would allow sufficient time for ASM participants to invest in care delivery transformation and for CMS to evaluate the impact of the model's payment adjustments. [[Page 32562]] [GRAPHIC] [TIFF OMITTED] TP16JY25.108 We propose an ASM start date of January 1, 2027. We alternatively considered proposing an ASM start date as January 1, 2026, but given the rulemaking process, an earlier start date would not have given ASM participants enough time to prepare for participation in ASM. We believe that the ASM test period of 7 years, as opposed to a shorter duration, is necessary to obtain sufficient data to compute a reliable impact estimate and to analyze the data from the Model to determine the next steps regarding potential expansion or extension of the Model. Further, we believe that a test period of 7 years is necessary to address and mitigate any potential implementation issues or unintended consequences. For a discussion of the proposed evaluation approach, please see section III.C.2.l of this proposed rule. We invite public comments on the proposed ASM test period of 7 years. We also seek comment on the proposed ASM start date of January 1, 2027. c. Proposed ASM Participants (1) Proposed Mandatory Participation We believe that requiring clinicians to participate in the model test is necessary to eliminate selection bias, yield generalizable results, and ensure an evaluable comparison group. Voluntary participation in Innovation Center models has demonstrated that those electing to voluntarily participate are more likely to have the infrastructure and experience to succeed under the model. Moreover, in a voluntary model, when the opportunity for financial gain is reduced or uncertain, participant attrition increases. We believe requiring participation in ASM would prevent this type of selection bias. Mandatory participation in ASM would also ensure a sufficient volume of participants to produce a necessarily diverse, representative evaluation of clinicians providing specialty care to Medicare beneficiaries with heart failure or low back pain. We believe ASM could highlight inefficient care utilization patterns and potentially inform quality improvement and care coordination incentives for application in the Quality Payment Program, the MVP reporting option, and future Innovation Center models. Finally, mandatory participation would generate a statistically robust test of ASM with results that are reliable, generalizable, and able to support potential model expansion. Therefore, we propose at Sec. 512.710(a)(1) that participation in ASM would be mandatory for all clinicians who meet the ASM participant eligibility criteria at Sec. 512.710(b). Specifically-- 2027 ASM performance year: ASM participants would be measured for performance and exempted from MIPS participation, if applicable, during CY 2027; report and be scored during CY 2028; and receive payment adjustments for CY 2027 performance in CY 2029; 2028 performance year: ASM participants meeting ASM participant eligibility criteria for the 2028 performance year would be measured for performance and exempted from MIPS participation, if applicable, during CY 2028; report and be scored during CY 2029; and receive payment adjustments for CY 2028 performance in CY 2030; 2029 ASM performance year: ASM participants meeting ASM participant eligibility criteria for the 2029 performance year would be measured for performance and exempted from MIPS participation, if applicable, during CY 2029; report and be scored during CY 2030; and receive payment adjustments for CY 2029 performance in CY 2031; 2030 ASM performance year: ASM participants meeting ASM participant eligibility criteria for the 2030 performance year would be measured for performance and exempted from MIPS participation, if applicable, during CY 2030; report and be scored during CY 2031; and receive payment adjustments for CY 2030 performance in CY 2032; and 2031 ASM performance year: ASM participants meeting ASM participant eligibility criteria for the 2031 performance year would be measured for performance and exempted from MIPS participation, if applicable, during CY 2031; report and be scored during CY 2032; and receive payment adjustments for CY 2031 performance in CY 2033. We propose at Sec. 512.710(a)(1) that once a clinician meets the ASM participant eligibility criteria, they would be considered an ASM participant for the duration of the model. We propose at Sec. 512.710(a)(2) that clinicians would be exempt from MIPS reporting for any ASM performance year that they meet ASM participant eligibility criteria and, therefore, must meet ASM model requirements. However, for any model year that a previously selected ASM participant does not continue to meet the ASM participant eligibility criteria for the upcoming ASM performance year/ASM payment year, the ASM participant would not be required to submit data in accordance with Sec. 512.720, as proposed, would not be scored in accordance with Sec. 512.745, as proposed, and would not receive an ASM payment adjustment in accordance with Sec. 512.750. In addition, because the proposed Medicare waiver at Sec. 512.775 only waives the requirements of section 1848(q) of the Act, and its implementing [[Page 32563]] regulations for an ASM performance year that ASM participants meets the ASM participant eligibility criteria, the ASM participant would be required to satisfy any MIPS reporting obligations and would receive a MIPS payment adjustment two years later, in accordance with current regulations, for any performance year that they do not meet the ASM participant eligibility criteria. Because ASM participants would potentially be subject to MIPS for any ASM performance year that they do not meet the ASM participant eligibility criteria, ASM payment adjustments may be applied during an ASM payment year during which an ASM participant is not actively participating in ASM and is instead participating in MIPS. We invite public comments on our proposal at Sec. 512.710(a) to require mandatory participation in ASM, exempt ASM participants from reporting under MIPS for only those years that they meet ASM participant eligibility criteria. (2) Proposed ASM Participants We propose that certain clinicians who treat heart failure and low back pain would be required to participate in ASM. We propose at Sec. 512.705 to define the term ``ASM participant'' to mean an individual clinician who, for at least one ASM performance year, satisfies the ASM participant eligibility criteria described in section III.C.2.c.(3). of this proposed rule and has been selected for participation in the model as described in section III.C.2.c.(5). of this proposed rule. For ASM specifically, we propose at Sec. 512.705 to define ``clinician'' as any ``eligible professional'' defined in section 1848(k)(3) of the Act, as identified by a unique TIN and NPI combination. We propose at Sec. 512.705 to define ``ASM heart failure participant'' as an ASM participant who meets the ASM participant eligibility criteria related to heart failure and ``ASM low back pain participant'' as an ASM participant who meets the ASM participant eligibility criteria related to low back pain (discussed later in this section of this proposed rule). We note that the definition of ``model participant'' contained in Sec. 512.110 should be interpreted to include each ASM participant. We propose to define an ``ASM targeted chronic condition'' at Sec. 512.705 as a medical condition that is a core focus of ASM; that is, heart failure or low back pain. We propose to define an ``ASM cohort'' as a group of ASM participants who treat the same ASM targeted chronic condition; specifically, we propose an ASM heart failure cohort and an ASM back pain cohort for this model. We propose to define the ``ASM heart failure cohort'' to be composed of all ASM heart failure participants and the ``ASM low back pain cohort'' to be composed of all ASM low back pain participants. We note that the proposed ASM cohorts would not include nonphysician practitioners (NPP) because NPPs would not meet the ASM participant eligibility criteria as proposed at Sec. 512.710(b), which states that only clinicians assigned one of the specialty codes at Sec. 512.710(d) may be ASM participants. Medicare does not currently assign specialty codes to NPPs; therefore, NPPs would not satisfy this criterion. We also considered defining an ASM participant as a group of clinicians within a single practice, provided each clinician individually meets the proposed ASM participant eligibility criteria. However, the inclusion of a group of specialists would result in fewer ASM participants overall and would add complexity to comparing performance across the ASM performance categories and determining final scores. We also believe that a group-based approach to ASM participation may not reflect the variable arrangements of care teams, as clinicians may also work outside the group, across multiple service locations and teams. Under this alternative group-level scenario, we would need to provide the ASM participant with a list of clinicians who individually meet the ASM participant eligibility criteria for an applicable ASM performance year. In this case, each eligible clinician on an ASM participant's clinician list would be considered a downstream participant in ASM, and the ASM participant would be required to contractually bind all downstream participants to comply with all laws pertaining to any patient-identifiable data requested from CMS and the terms of any agreement with CMS, as a condition of receiving and maintaining data from the ASM participant. We also considered whether the ASM participant under this alternative participant identification approach would be permitted to add or remove clinicians during an ASM performance year. We believe the addition of model policies and processes to account for individual clinician changes would increase operational complexity and the administrative burden of ASM participants if defined under this alternative group-based definition. We seek comments on our proposed definitions at Sec. 512.705. We also seek comments on adopting an alternative group participation policy and, if so, whether groups should be allowed to add or remove clinicians during a performance year. (a) ASM Heart Failure Cohort We propose at Sec. 512.710(d)(1) for the ASM heart failure cohort to only select clinicians who have been assigned a specialty code of cardiology on the plurality of their Medicare Part B claims, provided they meet all applicable ASM participant eligibility criteria under Sec. 512.710(b) for an ASM performance year. We understand that other clinicians may treat heart failure. However, only cardiologists would be required to participate in the model. Cardiologists commonly provide care to Medicare beneficiaries with heart failure and are well- positioned to improve outcomes by ensuring patients are optimized on guideline-directed medical therapy. We believe ASM would incentivize cardiologists to work with a primary care team to engage beneficiaries in addressing the root cause of their illness through lifestyle changes and preventing acute episodes. In addition to the cardiology specialty code, we considered including clinicians identified by additional cardiac specialty codes, as Medicare uses distinct specialty codes for cardiac electrophysiology, intensive cardiac rehabilitation, cardiac surgery, interventional cardiology, and advanced heart failure and transplant cardiology. Depending on the etiology of heart failure, some beneficiaries may receive care from interventional cardiologists and cardiac electrophysiologists. However, as proceduralists, these specialists do not commonly participate in the longitudinal management of beneficiaries with heart failure and have limited ongoing interactions with primary care.\125\ We also considered including cardiologists who specialize in adult congenital heart disease and advanced heart failure and transplant cardiology because these subspecialists often take over as primary managers of care. However, they do not generally co-manage patients or share responsibilities with primary care. Furthermore, they treat a particularly complex patient population, which makes comparing their performance to other cardiologists difficult. For these reasons, we do not propose to include clinicians with specialty codes other than cardiology as ASM participants. --------------------------------------------------------------------------- \125\ Sokos G, Kido K, Panjrath G, et al. Multidisciplinary Care in Heart Failure Services. J Card Fail. 2023;29(6):943-958. doi:10.1016/j.cardfail.2023.02.011. --------------------------------------------------------------------------- We seek comment on our proposal at Sec. 512.710(d)(1) to only include in the ASM heart failure cohort clinicians with [[Page 32564]] a cardiology specialty code on the plurality of their Medicare Part B claims. We also seek comments on including subspecialist cardiology codes in the ASM heart failure cohort. (b) ASM Low Back Pain Cohort We identified several nonsurgical and surgical specialties that commonly manage, treat, and maintain long-term relationships with patients with low back pain in the ambulatory setting. Both nonsurgical and surgical specialists offer meaningful, conservative (that is, less invasive) treatment options.\126\ However, some low back pain treatments, including spinal fusion for the treatment of non-complex low back pain, contribute to low-value care.\127\ For this reason, we believe including the specialists who most commonly perform these procedures is prudent for this model. --------------------------------------------------------------------------- \126\ Steinmetz A. Back pain treatment: a new perspective. Ther Adv Musculoskelet Dis. 2022 Jul 4;14:1759720X221100293. doi: 10.1177/1759720X221100293. PMID: 35814351; PMCID: PMC9260567. \127\ Buchbinder R, Underwood M, Hartvigsen J, Maher CG. The Lancet Series call to action to reduce low value care for low back pain: an update. Pain. 2020 Sep;161 Suppl 1(1):S57-S64. doi: 10.1097/j.pain.0000000000001869. PMID: 33090740; PMCID: PMC7434211. --------------------------------------------------------------------------- While surgical specialists are proceduralists, they are also commonly involved in the longitudinal management of Medicare beneficiaries with low back pain. Nevertheless, to ensure ASM would meet its goal of comparing like participants, we examined whether it would be appropriate to include nonsurgical and surgical specialists in the same ASM cohort. We stratified 2023 EBCM data by beneficiaries who underwent surgery on their spine and who had complex low back pain and found that, across all specialty types, more than 80 percent of beneficiaries with episodes for low back pain did not undergo spine surgery (83.8 percent for neurosurgery; 90.8 percent for orthopedic surgery), as demonstrated in Table 37. [GRAPHIC] [TIFF OMITTED] TP16JY25.109 Because orthopedic surgeons and neurosurgeons primarily treat low back pain non-surgically, we believe it is acceptable to include both surgical and nonsurgical specialists in the ASM low back pain cohort. Moreover, the EBCM episode volume eligibility criteria as described in section III.C.2.c.(3)(b) of this proposed rule would screen out specialists who are not treating low back pain longitudinally in the outpatient setting. We propose at Sec. 512.710(d)(2), for the ASM low back pain cohort, to select clinicians with a specialty type of anesthesiology, interventional pain management, neurosurgery, orthopedic surgery, pain management, and physical medicine and rehabilitation, provided they meet all applicable ASM participant eligibility criteria for an ASM performance year. We note that there may be some overlap between pain management, interventional pain management, and anesthesiology. However, we propose to include all three specialty designations to ensure we include anesthesiologists that have not yet updated their subspecialty with Medicare and those anesthesiologists treating low back pain without pursuing fellowship training. Although other clinicians do treat low back pain, we propose that only those listed would be required to participate in ASM. We considered other specialties who could trigger higher volumes of low back pain episodes. For example, chiropractors and physical therapists work closely with both primary care and specialists to treat low back pain, often providing first-line therapy. However, we believe the selected specialties are better positioned to direct and be held accountable for the longitudinal management of low back pain that may employ a variety of modalities. We seek public comments on our proposal at Sec. 512.710(d)(2) to only include in the ASM low back pain cohort clinicians with a specialty code of anesthesiology, interventional pain management, neurosurgery, orthopedic surgery, pain management, or physical medicine and rehabilitation on the plurality of their Medicare Part B claims. We seek comments on alternative low back pain-related specialty types that we considered including the ASM low back pain cohort. (3) ASM Participant Eligibility Criteria In selecting participants for ASM, we seek to ensure (1) we include a sufficient volume of clinicians treating Medicare beneficiaries for the same clinical condition in the ambulatory setting; (2) there is a reasonable expectation that participants can be measured under the model and held accountable for the care provided to Medicare beneficiaries with heart failure and low back pain; (3) the selected clinicians have the operational capacity to meet the ASM performance requirements described in section III.C.2.d of this proposed rule; and (4) the model test results would be statistically valid, reliable, and generalizable to specialty types included in ASM nationwide should the model test be successful and considered for expansion under section 1115A(c) of the Act. Therefore, we propose at Sec. 512.705 to define ``ASM participant eligibility criteria'' as the set of criteria defined at Sec. 512.710(b) that CMS uses to determine whether a clinician is selected to participate in ASM. We propose at Sec. 512.710(b) that clinicians who meet all of the following ASM participant eligibility criteria would be required to participate in ASM: Is a clinician who bills claims under the Medicare Physician Fee Schedule. Is identified by TIN/NPI as a selected specialty type. Meets the EBCM episode volume threshold applicable to an ASM targeted chronic condition. Is located in one of the selected mandatory geographic areas. [[Page 32565]] At Sec. 512.705, we propose to define ``mandatory geographic area'' to mean a core-based statistical area (CBSA) or metropolitan division as defined by the Office of Management and Budget (OMB) and selected by CMS under the terms of Sec. 512.710(f). We note that the proposed mandatory geographic areas may include rural areas as defined by MIPS at Sec. 414.1305, which is a ZIP code designated as rural by the Health Resources and Services Administration's Federal Office of Rural Health Policy (FORHP), using the most recent FORHP Eligible ZIP Code file available. We note that, as is the case in MIPS, clinicians practicing in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) who provide services that are billed exclusively under the RHC or FQHC payment methodologies would not be selected to participate in ASM. This is because FQHCs and RHCs receive All-Inclusive Rate (AIR) or Prospective Payment System (PPS) payments and do not submit claims under the Medicare Physician Fee Schedule. However, if these clinicians, separately, provide and bill for services under the Physician Fee Schedule, they would be required to participate in ASM provided they meet the ASM eligibility requirements. Clinicians who provide services at Critical Access Hospitals (CAHs) that are paid under Method I would be required to participate if they meet the ASM eligibility requirements, given that such services are paid under the Medicare PFS. Clinicians who provide services at CAHs that are paid under Method II, and meet all ASM eligibility requirements, would only be required to participate in ASM if they have not reassigned their billing rights to the Method II CAH; that is, if the clinician continues to submit professional claims through the PFS. This is because when a clinician reassigns their billing rights to a Method II CAH, the CAH bills those services through institutional claims. Under MIPS, we use both professional and institutional claims to trigger EBCMs and include clinicians who have reassigned their billing rights to a Method II CAH. However, in contrast to MIPS, ASM, as proposed, would only use professional claims to trigger EBCMs, and, therefore, would not include clinicians who have reassigned their billing rights to a Method II CAH. We seek comments on the proposed ASM participant eligibility criteria at Sec. 512.710(b). (a) ASM Participant and Specialty Type Identification As discussed in section III.C.2.c.(2) of this proposed rule, we propose at Sec. 512.710(d) that only a certain subset of clinicians who treat heart failure and low back pain would be required to participate in this model. To identify ASM participants, we propose to adopt the Quality Payment Program policies for identifying clinicians and clinical specialty. (i) ASM Participant Identification Medicare claims are processed using TINs, which may represent an individual clinician or may represent a hospital or group practice. Because we propose that ASM would evaluate performance at an individual clinician level, TIN alone would not be useful for ASM. Individual providers are, however, identifiable by their unique NPI. When TIN and NPI are used together, CMS is able to identify and evaluate individual providers. NPI-level participation also aligns with the Innovation Center's goal of creating a level playing field for all clinicians and removing unequal benefits afforded to consolidated group practices and health systems. The Quality Payment Program identifies MIPS eligible clinicians for the individual participation option, defined at Sec. 414.1305, by a combination of TIN and NPI, (hereafter TIN/NPI). We believe this method is also the best method of identifying clinicians in ASM. Using TIN/NPI for identifying ASM participants would offer several advantages. First, direct comparison of specialist performance between similar clinicians is a central feature of ASM. Participation at the TIN/NPI level puts the specialist as the unit of comparison, allowing for more meaningful assessment among peers. This level of participation would also produce more granular performance analysis and useful feedback for clinicians. Second, we also propose to use TIN/NPI to determine whether clinicians meet the other ASM participant eligibility criteria. Specifically, TIN/NPI would be used to ensure that each ASM participant has met the episode volume criteria for the EBCMs and for assigning clinicians to mandatory geographic areas described later in this section of this proposed rule. This approach would maintain consistency between participant identification and performance assessment within ASM and mirrors the methodology used in the Quality Payment Program. Finally, identifying ASM participants at the TIN/NPI level would enable us to identify claims for a single provider who works at more than one location or organization and, therefore, bills under multiple TINs. We recognize that an individual clinician may assign their billing rights to multiple TINs (that is, practice across multiple TINs). Such an arrangement would have implications on how we identify ASM participants. For example, if a clinician's NPI is associated with two TINs and meets the ASM participant eligibility criteria for both TINs, then we would consider each TIN/NPI combination to be a separate ASM participant that must separately meet model requirements and report required data. Accordingly, we would separately assess performance and determine payment adjustments for each unique TIN/NPI combination, as described in sections III.C.2.d.(1).(b) and III.C.2.f. of this proposed rule. If an NPI is associated with two TINs but only meets the ASM participant eligibility criteria for one TIN/NPI combination, the clinician would only be considered an ASM participant under that one TIN/NPI combination. We also considered selecting a single TIN/NPI combination to be the ASM participant in the case that a clinician meets ASM eligibility requirements under more than one TIN/NPI combination. Under that scenario, we would have selected the TIN/NPI combination with the majority of EBCM-triggered episodes for a given ASM cohort (see section III.C.2.c.(3).(b) for further discussion on EBCM as part of the ASM participant eligibility criteria). However, this alternative could adversely affect participant volume and exclude appropriate beneficiary episodes. We believe that identifying ASM participants at the TIN/NPI level drives direct accountability so that outcomes are clearly attributed to ASM participants. Identifying ASM participants at the TIN/NPI level would allow for a like-to-like performance assessment of clinicians who meet ASM participant eligibility criteria. We believe this performance comparison approach would provide granular and actionable insights into best practices and specialty care delivery. Therefore, we propose to identify clinicians for ASM by the same method used by the Quality Payment Program. Specifically, we propose to use TIN/NPI to identify clinicians as ASM participants. We seek public comment on our proposal at Sec. 512.710(b)(2) that ASM participants would be identified at the TIN/NPI level. We also seek comments [[Page 32566]] on the alternative method of using TIN-level specialty type for identifying ASM participants, as well as selecting a single TIN/NPI combination as an ASM participant in the case that a clinician meets ASM eligibility requirements under more than one TIN/NPI combination. (ii) Participant Exclusion due to Change in TIN During an ASM Performance Year We recognize that ASM participants may change practices (as reflected by a change in TIN) during an ASM performance year. In such circumstances, we would need to determine whether the ASM participant must continue to meet model requirements for the original TIN, for the new TIN, or would no longer be required to meet model requirements under either TIN for that ASM performance year. We propose at Sec. 512.710(c)(1) that an ASM participant who, during an applicable ASM performance year, no longer assigns their billing rights to the TIN CMS used to identify them as an ASM participant must notify CMS of such change within 30 days of the change in a form and manner determined by CMS. We propose at Sec. 512.710(c)(2) that an ASM participant who notifies CMS of a change in TIN during an ASM performance year would no longer be required to meet ASM requirements, including data submission requirements described at Sec. 512.720, for the applicable ASM performance year and would instead be subject to MIPS reporting obligations, if applicable. We also propose that the waivers, including the MIPS waiver, established at Sec. 512.775 would no longer apply beginning on the date we determine the clinician is no longer required to meet model requirements for the applicable ASM performance year. If the ASM participant fails to notify CMS within 30 days of no longer assigning billing rights to the original TIN in the form and manner determined by CMS, then the ASM participant would be required to meet the data submission requirements described at Sec. 512.720 for the applicable ASM performance year. Given our proposal to determine whether clinicians meet ASM participant eligibility criteria for each ASM performance year, we believe that we would naturally identify the movement of individual clinicians to a different TIN between ASM performance years. However, if an ASM participant reassigns their billing rights to a new TIN during an ASM performance year, CMS would not have sufficient data for the new TIN/NPI combination to determine if the ASM participant continues to meet all ASM participant eligibility criteria. For example, we would not have timely EBCM data available for the new TIN/ NPI combination to determine if the ASM participant meets the 20 EBCM episode volume criterion (discussed in section III.C.2.c.(3).(b) of this proposed rule) under the new TIN. Without complete data to evaluate whether the ASM participant continues to meet the ASM participant eligibility criteria, we propose, for that ASM performance year, the ASM participant would not be required to submit data in accordance with Sec. 512.720, as proposed, would not be scored in accordance with Sec. 512.745, as proposed, and would not receive an ASM payment adjustment in accordance with Sec. 512.750. Because the proposed Medicare waiver at Sec. 512.775 only waives the requirements of section 1848(q) of the Act, and its implementing regulations for an ASM performance year that ASM participants meets the ASM participant eligibility criteria, the ASM participant would be required to satisfy any MIPS reporting obligations and would receive a MIPS payment adjustment two years later, in accordance with current regulations. We intend to monitor TIN changes in each ASM cohort within each ASM performance year and across the ASM model test period. If CMS determines that changes to this policy are warranted for future ASM performance years, we would propose those changes through notice and comment rulemaking. We considered requiring an ASM participant who reassigns their billing rights to a new TIN during an ASM performance year to continue to meet all model requirements for the applicable ASM performance year under the new TIN/NPI combination. As ASM focuses on specialty care related to specific chronic conditions, we considered that the ASM participant would likely continue to furnish services related to ASM targeted chronic conditions under the same specialty type and trigger applicable EBCM episodes during the remainder of the applicable ASM performance year. As discussed in sections III.C.2.d.(3) and III.C.2.e.(2).(b) of this proposed rule, in the case that an ASM participant under a new TIN/NPI combination does not trigger at least 20 episodes during the remainder of the applicable ASM performance year, the ASM participant would not receive a final score. Accordingly, they would receive no payment adjustments in the corresponding ASM payment year as described at Sec. 512.750(d). However, if an ASM participant under a new TIN were to: (1) receive quality and cost ASM performance category scores discussed in sections III.C.2.d.(2).(i) and III.C.2.d.(3).(g) of this proposed rule, and (2) meet the requirements to receive a final score as discussed in section III.C.2.e.(2) of this proposed rule, then we believe it would be appropriate to determine an ASM payment adjustment factor and ASM payment multiplier for the ASM participant under the new TIN/NPI combination. We ultimately decided to not propose this policy because we believe that conforming to the policy set forth in section III.C.2.c.(1), which requires an ASM participant to satisfy any MIPS reporting obligations when they no longer meet ASM participant eligibility criteria, would avoid adding unnecessary complexity to the model. We also considered not requiring an ASM participant to notify CMS if the change in TIN occurs during an ASM performance year and continuing to require the ASM participant to meet all model requirements under the original TIN/NPI combination for the applicable ASM performance year. However, we believe that it would be challenging for the ASM participant to access the necessary data to meet the data submission requirements if no longer affiliated with the original TIN. Therefore, we do not believe it would be appropriate to hold an ASM participant in this situation accountable for ASM requirements under the original TIN. We seek comments on our proposal at Sec. 512.710(c) to exclude ASM participants who change TIN during an applicable ASM performance year from ASM reporting requirements for that year of the model. We also seek comments on the alternatives of requiring the ASM participant to meet model requirements under their new TIN, as well as the alternative of requiring the ASM participant to meet model requirements and data submission requirements under the original TIN/NPI combination that identified them as an ASM participant. (iii) ASM Specialty Identification To ensure that all clinicians meeting the specialty requirements described at Sec. 512.710(d) are included in the model, we propose to define ``specialty type'' based on the specialty code indicated on the plurality of a clinician's Medicare Part B claims during the period described in section III.C.2.c.(5) of this proposed rule. Specifically, we plan to use the same specialty codes used for the Quality Payment Program to identify [[Page 32567]] MIPS eligible clinicians as defined at Sec. 414.1305.\128\ --------------------------------------------------------------------------- \128\ https://www.federalregister.gov/d/2022-23873/page-70039. --------------------------------------------------------------------------- The specialty codes used on Medicare Part B claims are not reported by clinicians but are assigned to claims by the Medicare Administrative Contractors (MACs) and derived from the clinician-reported specialty designations that are entered in the Provider Enrollment, Chain, and Ownership System (PECOS) as part of the Medicare provider enrollment application. Because a clinician's specialty code could change during an ASM performance year, we propose to use the specialty code assigned to the majority of a clinician's Medicare Part B claims for determining specialty type for ASM. We also considered using PECOS specialty designation alone for the purpose of determining specialty type for ASM. However, the PECOS specialty codes are self-reported, and a single clinician may list more than one primary specialty, which may make it unreliable as a single source for identifying a clinician's primary specialty. We stated in the CY 2023 PFS final rule that given the strong alignment between PECOS data and claims data and our historical use of claims data to identify a clinician's specialty, we believe that Medicare Part B claims data would be the best data source to use to identify a clinician's specialty (87 FR 70039).\129\ Moreover, given that the Quality Payment Program uses Medicare claims data, we do not want to create inconsistencies between specialty types for ASM and MIPS. We also considered using the Health Care Provider Taxonomy Codes, which categorize the type, classification, and/or specialization of health care providers. These codes offer more specificity than PECOS (87 FR 70039) and are used when applying for an NPI from the National Plan and Provider Enumeration System (NPPES). However, they are not verified for accuracy.\130\ We have previously elected not to use the Health Care Provider Taxonomy Codes for MIPS because of uncertainty regarding the reliability of NPPES as a data source for MIPS eligibility determinations (87 FR 70039). We analyzed the congruence between specialty designations made for the purposes of MIPS and those reported in NPPES for the proposed specialty types for each of ASM's targeted chronic conditions. Our analysis found a high degree of congruence between the two specialty type codes, likely because we provide a crosswalk of the Health Care Provider Taxonomy Codes and Medicare Specialty Codes that can be used by a clinician when they enroll in Medicare through PECOS.\131\ Given the alignment between these coding systems, we believe that remaining consistent with the specialty type determination methodology used by the Quality Payment Program is important for potential scalability of ASM. --------------------------------------------------------------------------- \129\ https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/cms855i.pdf. \130\ https://data.cms.gov/resources/medicare-provider-and-supplier-taxonomy-crosswalk-methodology. \131\ https://data.cms.gov/provider-characteristics/medicare-provider-supplier-enrollment/medicare-provider-and-supplier-taxonomy-crosswalk/data. --------------------------------------------------------------------------- We seek comments on our proposal at Sec. 512.710(d) to identify specialty type based on the specialty code indicated on the plurality of a clinician's Medicare Part B claims. We also seek comments on using PECOS specialty codes alone and Health Care Provider Taxonomy Codes for the purpose of determining specialty type for ASM. (b) Episode-Based Cost Measure (EBCM) Episode Volume We believe that ASM participant eligibility criteria must appropriately identify clinicians who furnish a sufficient volume of services related to ASM targeted chronic conditions and who can be appropriately evaluated on costs related to the ASM targeted chronic conditions. We propose to identify ASM participants using the volume of services related to heart failure and low back pain furnished by clinicians who have a specialty designation that corresponds with the proposed specialty types discussed in III.C.2.c.(2). of this proposed rule. Only clinicians with the proposed specialty types that furnish a volume of services above a specific threshold related to the applicable ASM targeted chronic condition would be identified as ASM participants. That is, not all clinicians with the proposed specialty types related to heart failure and low back pain would be required to participate in ASM. We propose to use MIPS EBCMs to determine volume, rather than assessing volume based on claims for individual services. Specifically, the volume of attributed episodes from EBCMs related to the ASM targeted chronic conditions would serve as the data source by which we evaluate the volume of furnished episodes for ASM. We propose at Sec. 512.710(e)(1) to identify ASM heart failure participants using the volume of episodes attributed to a TIN/NPI in accordance with the heart failure EBCM as specified under MIPS. We propose at Sec. 512.710(e)(2) to identify ASM low back pain participants using the volume of episodes attributed to a TIN/NPI in accordance with the low back pain EBCM as specified under MIPS. We refer readers to section III.C.2.c.(5). of this proposed rule on the proposed processes and specific years of data that we would use to assess EBCM volume to identify ASM participants. EBCMs assess Medicare resource use for a specific condition or procedure based on only those costs that occur as part of an attributed clinician's care management. CMS uses claims data from Medicare Parts A and B, and some Medicare Part D data, if applicable, to construct the EBCMs. An episode is initiated when a clinician submits a professional claim for at least two separate services, provided to a single beneficiary, that are clinically related to the chronic condition being assessed. Although the episode is initiated and attributed to a particular clinician, the episode includes all Medicare Part A and B services for the length of the episode, as defined by the measure specifications (88 FR 79339 through79347). Therefore, regardless of who provides the care, an episode includes all services related to a beneficiary's condition, routine care services, and consequences of care, and excludes services that are clinically unrelated to the targeted condition of the measure.\132\ --------------------------------------------------------------------------- \132\ https://www.cms.gov/files/document/wave-4-measure-development-process-macra.pdf. --------------------------------------------------------------------------- To attribute episodes to practices and clinicians, CMS first attributes episodes to a TIN when it performs two services indicating care for a particular condition for a single beneficiary within a certain number of days (for example, 180 days); both professional claims must have diagnosis codes for the relevant chronic condition. CMS then attributes episodes to each clinician (NPI) within the group (TIN) that rendered at least 30 percent of the total number of qualifying services during the episode. For the heart failure EBCM, CMS also checks that the clinician prescribed at least two condition- related prescriptions on different days to two different patients during the calendar year used to construct the episode plus a 1-year lookback period to ensure that attributed clinicians are actually involved in providing ongoing chronic care management.\133\ The low back pain EBCM does not use this additional check since the types of clinicians that manage low back pain may may not prescribe the relevant medication, [[Page 32568]] which could prevent certain clinician types from being attributed episodes.\134\ --------------------------------------------------------------------------- \133\ https://www.cms.gov/files/zip/2024-cost-measure-information-forms-zip.zip-0. \134\ https://www.cms.gov/files/zip/mips-chrcondition-episode-based-cost-measures-attribution-methodology-2023-zip.zip. --------------------------------------------------------------------------- CMS began development and field testing of the heart failure and low back pain measures in 2022.\135\ We finalized the inclusion of the heart failure and low back pain measures to the MIPS cost performance category beginning in the 2024 MIPS performance period/2026 MIPS payment year (88 FR 79319). We also finalized the inclusion of the heart failure EBCM in the Advancing Care for Heart Disease MVP (88 FR 80022 through 80025; 89 FR 99015 through 99019) and the low back pain EBCM in the in the Rehabilitative Support for Musculoskeletal Care MVP (88 FR 80002 through 80007; 89 FR 99050 through 990054). --------------------------------------------------------------------------- \135\ https://www.cms.gov/files/document/wave-4-measure-development-process-macra.pdf. --------------------------------------------------------------------------- We believe that the construction of the EBCMs and the existing use of these measures within MIPS and MVPs relevant to ASM targeted chronic conditions make the measures an appropriate data source by which to identify ASM participants that furnish enough services and provide longitudinal care management for Medicare beneficiaries diagnosed with ASM targeted chronic conditions. We believe that an annual threshold of 20 or more attributed episodes from an EBCM is appropriate for identifying ASM participants that can be held accountable for quality and cost related to ASM targeted chronic conditions. We have defined a case minimum of 20 episodes for the purposes of scoring chronic condition EBCMs in MIPS, including MVP reporting, as specified in Sec. 414.1350(c)(6) (88 FR 79346 through 79348). We believe using a similar 20-episode minimum from the calendar year used for determining ASM participant eligibility increases the likelihood that an ASM participant would trigger and be attributed at least 20 episodes within a given ASM performance year. Using a 20-episode threshold would increase the likelihood that they could be scored on the applicable EBCM during the relevant ASM performance year, as described in section III.C.2.d.(3).(g) of this proposed rule. We also considered using an EBCM episode threshold greater than 20 episodes. For example, we considered the effects of using a 30-episode or 50-episode threshold. In our analysis of calendar year 2023 data, we found that a 30-episode threshold would decrease the number of potentially eligible ASM participants by 43 percent for heart failure and 35 percent for low back pain relative to the 20-episode threshold. We found that a 50-episode threshold would decrease the number of potentially eligible ASM participants by 76 percent for heart failure and by 65 percent for low back pain relative to the 20-episode threshold. We believe that the smaller number of potentially eligible ASM participants under a higher EBCM episode threshold would make for a less reliable model test. We considered but are not proposing to add the MIPS low volume threshold of Medicare Part B allowed charges for covered professional services, Medicare patients that receive Medicare Part B covered professional services, and the number of Medicare Part B services provided for individual MIPS eligible clinicians as defined at Sec. 414.1305 as part of the ASM participant eligibility criteria. Adding the MIPS low volume threshold would mean that clinicians would have to meet the MIPS eligibility determinations as defined at Sec. 414.1305, as well as all other ASM participant eligibility criteria, to be identified as an ASM participant. We considered using the same low volume threshold for individual MIPS eligible clinicians given the use of the MVP framework for selecting measures for ASM and to identify ASM participants that furnish a sufficient volume of services related to ASM targeted chronic conditions. Given the importance of using EBCM episode volume to identify ASM participants, we found that inclusion of the MIPS low volume threshold in our ASM participant eligibility criteria would add a secondary service volume criterion. We estimate that the inclusion of the MIPS low volume threshold on top of the EBCM episode volume threshold could potentially decrease the number of ASM participants by more than 50 percent. We believe that the use of the EBCM 20-episode threshold would be a more appropriate criterion for identifying ASM. We seek public comments on our proposals at Sec. 512.710(e) to use the heart failure EBCM as specified under MIPS to identify potential ASM heart failure participants and the low back pain EBCM as specified under MIPS to identify potential ASM low back pain participants. We also seek comments on our proposal that clinicians who have 20 or more heart failure EBCM episodes attributed in accordance with the heart failure EBCM as specified under MIPS during the calendar year 2 years prior to the applicable ASM performance year would meet the ASM participation eligibility criterion at Sec. 512.710(b)(3) and clinicians who have 20 or more low back pain EBCM episodes attributed in accordance with the low back pain EBCM under MIPS during the calendar year 2 years prior to the applicable ASM performance year would similarly meet the ASM participation eligibility criterion at Sec. 512.710(b)(3). We also seek comment on specifying a higher episode volume threshold and using the MIPS low volume threshold of Medicare Part B allowed charges for covered professional services for identifying clinicians who provide a sufficient volume of services. (4) Mandatory Geographic Areas (a) Identification of Geographic Areas We propose at Sec. 512.710(f) that only clinicians in certain selected areas would be required to participate in the model. As proposed in Sec. 512.710(f), the proposed unit of selection is CBSAs except in cases where OMB has divided large metropolitan statistical areas (MSAs) into metropolitan divisions. For these MSAs, we propose to use these metropolitan divisions in place of the CBSA. Using metropolitan divisions rather than large MSAs would enable more precise matching of intervention and control groups by using geographic units of more comparable size, which would improve the statistical validity of our evaluation approach. OMB Bulletin 23-01, issued on July 21, 2023, states that there are 935 CBSAs in the United States and Puerto Rico. OMB delineates MSAs and micropolitan statistical areas, which are referred to collectively as CBSAs. The general concept of the MSA and micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core. MSAs contain at least one urban area of 50,000 or more population; micropolitan statistical areas contain at least one urban area of at least 10,000 and less than 50,000 population. If specified criteria are met, an MSA containing a single core with a population of 2.5 million or more may be subdivided into metropolitan divisions, which function as distinct areas within the larger metropolitan statistical area. CBSAs are composed of entire counties. There are 393 MSAs, of which 13 are subdivided into 37 metropolitan divisions, and 542 micropolitan statistical areas in the United States and Puerto Rico, as of July 2023. We also considered using the following geographic areas as the geographic unit from which ASM [[Page 32569]] participants are identified: (1) certain ZIP Codes based on their Hospital Referral Regions (HRR); or (2) certain states. We considered selecting based on HRRs for ASM. HRRs represent regional health care markets for tertiary medical care and are defined by determining where most patients were referred for major cardiovascular surgical procedures and for neurosurgery. There are 306 HRRs with at least one city where both major cardiovascular surgical procedures and neurosurgery are performed. While HRRs may sufficiently reflect referral patterns for heart failure episodes of care, they are less appropriate for low back pain episodes. Therefore, we decided that using CBSAs and metropolitan divisions as a geographic unit is preferable over HRRs for this model. We also considered selecting states as the geographic unit of selection for ASM. However, we concluded that CBSAs and metropolitan divisions would provide a more granular unit of analysis, allowing for better matching of comparison areas. Additionally, selecting states would greatly reduce the number of independent geographic areas subject to selection under the model, and thus would decrease the statistical power of the model evaluation. Finally, CBSAs and metropolitan divisions straddle state lines where providers and Medicare beneficiaries can easily cross these boundaries for health care. We propose that we would select the CBSAs and metropolitan divisions through the stratified random sampling methodology described later in this section of this proposed rule to participate in ASM. Although CBSAs are revised periodically, we propose to use the CBSA and metropolitan division designations in OMB Bulletin 23-01 issued on July 21, 2023 as the CBSA designations for purposes of selecting participants for this model, regardless of whether such CBSA designations have changed since July 21, 2023, or would change at some point during the ASM test period. We believe that this approach would best maintain the consistency of the ASM participants in the model, which is crucial for our ability to evaluate the effects of the model test on quality of care and changes in Medicare spending. As discussed later in this in section III.C.2.c.(4).(e) of this proposed rule, we propose in Sec. 512.710(f)(4) to use the ZIP Codes of the service locations of each clinician as discussed in section III.C.2.c.(4).(e) of this proposed rule to assign each clinician to a single CBSA or metropolitan division. Each clinician that CMS determines falls under the selected CBSA or metropolitan division, and that otherwise meets the other eligibility criteria set forth in Sec. 512.710(b), would be required to participate in the model. Based on our proposal to randomly select CBSAs and metropolitan divisions as ASM's mandatory geographic areas, III.CZIP Codes and other areas not located in a CBSA or metropolitan division would not be included in the ASM selection methodology as discussed in section III.C.2.c.(4).(b) of this proposed rule. We note that Transforming Episode Accountability Model (TEAM), a mandatory episode-based payment model, uses CBSAs as the geographic unit of selection (as defined in Sec. 512.515). We note that the proposed mandatory geographic areas may include some areas considered as rural areas under MIPS, which defines rural areas at Sec. 414.1305 as a ZIP Code designated as rural by the Health Resources and Services Administration's Federal Office of Rural Health Policy (FORHP), using the most recent FORHP Eligible ZIP Code file available. We seek comments on our proposal to use CBSAs and metropolitan divisions as the geographic unit from which ASM participants are identified. We seek comments on our proposal to use the ZIP Codes of the service locations of each clinician as discussed in section III.C.2.c.(4).(e) of this proposed rule to assign each clinician to a single CBSA or metropolitan division, including ZIP Codes designated as rural by HRSA's FORHP using the most recent FORHP Eligible ZIP Code file available. We seek comment on our proposal to require all eligible clinicians within a CBSA or metropolitan division that the Innovation Center selects through the stratified random sampling methodology as part of the intervention group described in section III.C.2.c.(4).(d) in this proposed rule to participate in ASM. Finally, we seek comments on our proposal to use the CBSA and metropolitan division designations in OMB Bulletin 23-01 issued on July 21, 2023 as the CBSA designations for purposes of selecting participants for this model. (b) Exclusion of Certain CBSAs and Metropolitan Divisions We propose at Sec. 512.710(f)(1) that we would not consider certain CBSAs or metropolitan divisions for selection. Specifically, we propose at Sec. 512.710(f)(1)(ii) that we would exclude any CBSA or metropolitan division located entirely in U.S. territories due to challenges we would have in finding suitable geographic areas for comparison. We also propose at Sec. 512.710(f)(1)(i) to exclude any CBSAs or metropolitan divisions that do not have any clinicians of the mandated specialty types with at least 20 eligible episodes between January 1, 2024 and December 31, 2024 in accordance with the EBCM episode threshold described in section III.C.3.c.(3).(b). We believe it is unlikely for these CBSAs or metropolitan divisions to have data available for evaluation after the model starts. After applying these criteria, we expect to have approximately 600 CBSA and metropolitan divisions remain available for selection into ASM. We considered the alternative of excluding from ASM any CBSA or metropolitan divisions located within a state or portion of a state with a commitment to participate in the Advancing All-Payer Health Equity Approaches and Development (AHEAD) model. The AHEAD model is a state-wide CMS Innovation Center model implemented under section 1115A of the Act that aims to increase investment in primary care, provide financial stability for hospitals, and support beneficiary connections to community resources. We decided not to propose these exclusions because ASM would not interact with the payment methodology in AHEAD and may help align a broader set of clinicians towards the goals of AHEAD. We seek comments on our proposal to exclude from selection any CBSA or metropolitan division located entirely in a U.S. territory and any CBSAs or metropolitan divisions that do not have any clinicians of the mandated specialty types with at least 20 eligible episodes between January 1, 2024 and December 31, 2024. We seek comments on the alternative to exclude AHEAD geographies from ASM's mandatory CBSA or metropolitan divisions. (c) Geographic Selection Methodology To determine which CBSAs and metropolitan divisions would be included in the model, we propose to use a stratified random sampling method to select approximately 25 percent of CBSAs and metropolitan divisions into ASM following the process described in the following two sections of this proposed rule. We propose at Sec. 512.710(f)(2) to stratify CBSAs and metropolitan divisions into mutually exclusive groups based on 3 CBSA/metropolitan division-level characteristics: average total Parts A and B episode spending, volume of eligible episodes, and metropolitan division status. We propose at Sec. 512.710(f)(2)(i) [[Page 32570]] through (vi) stratifying eligible CBSAs into six mutually exclusive groups: Eligible CBSAs with ``Low'' average total episode spending (as defined below) and ``Low'' eligible episode volume (as defined below); Eligible CBSAs with ``Low'' average total episode spending and ``High'' eligible episode volume (as defined below); Eligible CBSAs with ``High'' average total episode spending (as defined below) and ``Low'' eligible episode volume; Eligible CBSAs with ``High'' average total episode spending and ``High'' eligible episode volume; Eligible CBSAs with ``Very High'' eligible episode volume (as defined below); Eligible metropolitan divisions. (i) Average Total Parts A and B Episode Spending We propose at Sec. 512.710(f)(2) to measure average total Medicare Parts A and B episode spending using claims data from January 1, 2024 to December 31, 2024. One of the main objectives of ASM is to reduce spending, and therefore, it would be important to account for the significant variation in average episode spending across geographic areas. This stratification would help ensure that we can measure any variation in model effects between high and low spending areas. We propose to use a single, pooled measure including spending for both heart failure and low back pain episodes. This would help limit the number of overall strata and we believe would allow for adequate representation of both high spending low back pain areas and high spending heart failure areas, where the potential for savings may be greatest. We propose to categorize CBSAs into two categories based on average total parts A & B episode spending: below the median (``Low'') and at-or-above the median (``High''). (ii) Volume of Eligible Episodes We propose at Sec. 512.710(f)(2) to measure eligible episode volume using claims data from January 1, 2024 to December 31, 2024. We expect significant variation in the volume of eligible episodes across areas. This variation may reflect differences in other characteristics that are related to ASM performance. For example, large, active markets with a larger number of specialists may have structural advantages in performing well in ASM compared to smaller, less active markets. The proposed stratification on volume of eligible episodes would help ensure we select an adequate sample of areas with varying levels of specialty activity so that we would be able to identify statistical differences in outcomes across levels of specialty activity. This stratification would also help ensure that selected CBSAs have sufficient episode volume to support a robust evaluation. We propose to use a single, pooled measure including both heart failure and low back pain episodes. This allows us to limit our number of stratification variables and analysis of 2023 episode-level data found that the episode volumes of the two conditions are highly correlated across CBSAs. We propose to categorize CBSAs into three categories based on total episode volume: below median (``Low''), at-or-above median up to the 95th percentile (``High''), and the 95th percentile and above (``Very High''). We propose to stratify out the top 5 percent of CBSAs by episode volume because of the right-skewed nature of the episode volume distribution. (iii) Metropolitan Divisions The largest 13 CBSAs are divided into 37 metropolitan divisions. Metropolitan divisions therefore represent a subdivision level compared to CBSAs. Additionally, these metropolitan divisions, all belonging to CBSAs with a core population of 2.5 million or more, may have important characteristics in common beyond episode volume and average total spending. To ensure adequate representation of metropolitan divisions in the sample, we propose to categorize metropolitan divisions into their own stratum. We considered stratifying by other characteristics, including ACO penetration, supply of PCPs, region, rurality, and participation in the AHEAD model. We seek comments on our proposed selection strata as well as alternatives considered. [GRAPHIC] [TIFF OMITTED] TP16JY25.110 (d) Stratified Random Selection of Mandatory Geographic Areas A representative sample of clinicians that meet eligibility requirements for the proposed ASM is necessary for a robust evaluation of the model. Testing the model in this manner would also allow us to learn more about utilization patterns of health care services and how to incentivize the improvement of quality and care coordination for chronic heart failure and low back pain. This learning could potentially inform the Quality Payment Program and the future of the MVP reporting option. Therefore, we are proposing a broad, representative sample of clinicians in multiple geographic areas. We determined that the best method for obtaining the necessarily diverse, representative group of clinicians would be through stratified, random selection. A stratified, randomly selected sample would allow us to ensure statistical [[Page 32571]] balance across characteristics of interest (for example, average spending and episode volume) and would provide results that applies generally to similar Medicare clinicians that submit FFS claims and treat heart failure or low back pain and would allow for a more robust evaluation of the model. We also believe that there could be broader learnings from ASM that could apply to other conditions and specialists. At Sec. 512.710(f)(3), we propose to randomly select CBSAs and metropolitan divisions for ASM from the six stratified groups described above at a 40 percent rate (that is, each CBSA and metropolitan division in each stratum has a 40 percent chance of being selected into the model). If 40 percent of a given stratum does not result in a whole number of CBSAs or metropolitan divisions, CMS would round up to the next whole number to ensure that at least 40 percent of areas from each stratum are selected. Table 38 provides an illustrative example of the six stratified groups based on CY 2023 data. We considered using other selection rates but based on preliminary analyses, we believe these selection rates would produce adequate sample size and participant mix for the model test. We refer readers to the regulatory impact analysis in section VII. of this proposed rule for further discussion on the scale of ASM and its estimated financial impact. We conducted power analyses to identify detectable changes in total and episode spending between a potential group of CBSAs and metropolitan divisions selected for the model and a potential control group of CBSAs using a Type I error of 0.05 and Type 2 error of 0.2 (implying a power of 0.8). The analysis shows that, if 240 eligible CBSAs are selected for ASM, we would be able to detect about a 3.5 percent change in total episode spending if we look at heart failure and low back pain episodes separately. Allowing a higher Type I error of 0.25 and pooling heart failure and low back pain episodes would allow us to detect about a 1.7 percent change in total episode spending. This model may be underpowered to detect statistically significant changes in total spending. However, the model may be more likely to generate statistically significant savings among certain low-value services or spending categories that are major cost drivers for heart failure and low back pain (for example, imaging, surgeries, hospital admissions). In a case where the model's impact on total spending is ambiguous, significant savings among these categories of spending may provide strong supporting evidence that Medicare saved money overall. We seek public comments on our proposed approach to random selection of CBSAs and metropolitan divisions from our proposed selection strata as well as all alternatives considered. (e) Assignment of Geographic Areas to Clinicians We propose at Sec. 512.710(f)(4) to assign a single CBSA or metropolitan division to each clinician based on the clinician's most common episode-level service location ZIP Code for each ASM performance year. We believe that it would be appropriate to use service location data from EBCM episodes to identify the CBSA or metropolitan division of clinicians' service locations given the use of the EBCMs as part of ASM participant eligibility criteria. As discussed in section III.C.2.c.(3).(b). of this proposed rule, EBCM episodes would help identify ASM participants who render a meaningful volume of services related to ASM's targeted chronic conditions. Using the service location from Medicare Part B claims of rendered services used to construct the episode as the basis for determining the service location of a clinician would keep a consistent and accurate source of data by which to make these geographic assignments. We also considered using the CBSA or metropolitan division related to the ZIP Code of the TIN to which a clinician has assigned billing rights for the purpose of determining whether a clinician furnishes ASM-related services in a mandatory geographic area. We believe that it would not be appropriate use a TIN's ZIP Code since a TIN's ZIP Code does not necessarily correlate to service location, particularly in the case of multi-site practices. Using episode-level service location ZIP Code assignments, we propose at Sec. 512.710(f)(4) the following process to identify clinician-level CBSA or metropolitan division assignments: Identify all EBCM episodes relevant to ASM targeted chronic conditions attributed to a clinician during the calendar year 2 years before the applicable ASM performance year (or during January 1, 2024 through December 31, 2024 for initial CBSA or metropolitan division assignment). For each episode, establish a service location ZIP Code. An episode may consist of several Medicare Part B Claims. Not all of the ZIP Codes set forth on the Medicare Part B claims form may be the same. To determine which ZIP Code the episode would be associated with, we propose to review all applicable Medicare Part B claims associated with the episode and identify the Medicare Part B claim line ZIP Code appearing most often. An episode could have an equal number of ZIP Codes on claims associated with the episode. We would break any ties between ZIP Codes by determining the episode's ZIP Code based on the ZIP Code on the claim with the highest total cost indicated by the total standardized allowed amount, or in instances a second tie break is needed, by using the ZIP Code on the claim with the most recent date. Match the ZIP Code assigned to each episode to a CBSA or metropolitan division. In other words, determine the CBSA or metropolitan division to which the episode is assigned. To do so, we propose to use ZIP Code and CBSA/metropolitan division crosswalks published quarterly by the U.S. Department of Housing and Urban Development.\136\ Some CBSA and metropolitan division share ZIP Codes, meaning a ZIP Code could be assigned to multiple CBSAs and metropolitan divisions. In these instances, to ensure each ZIP Code is linked to a unique CBSA or metropolitan division, we would assign the ZIP Code to the CBSA or metropolitan division where the ZIP Code has the highest proportion of total addresses. For example, if ZIP-A spans CBSA-B and CBSA-C, and ZIP-A has more addresses in CBSA-B, then we would assign ZIP-A to CBSA-B. We would get the proportion of total addresses in each ZIP Code from the ZIP Code to CBSA/metropolitan division crosswalk published by the U.S. Department of Housing and Urban Development.\137\ The crosswalk also subdivides the proportion of total addresses into the number of business addresses, residence addresses, and other addresses. If the proportion of total addresses within the ZIP Code is equal across CBSAs or metropolitan divisions (meaning that we cannot use the proportion of total addresses to assign a single CBSA or metropolitan division to the ZIP Code), then we would assign the ZIP Code to the CBSA and metropolitan division (if applicable) with the highest proportion of business addresses (regardless of the number of residence addresses or other addresses). We use business addresses as the tiebreaker since business addresses would represent where clinicians would practice, which aligns with our overall approach for using service location for participant identification. --------------------------------------------------------------------------- \136\ https://www.huduser.gov/portal/datasets/usps_crosswalk.html. \137\ https://www.huduser.gov/portal/datasets/usps_crosswalk.html. --------------------------------------------------------------------------- [[Page 32572]] Determine the appropriate CBSA or metropolitan division for each clinician attributed applicable episodes. If the clinician is attributed multiple episodes in multiple CBSAs or metropolitan divisions, we would match the clinician with the CBSA or metropolitan division where the clinician has the most assigned episodes. If a clinician has an equal number of episodes assigned to multiple CBSAs or metropolitan divisions, we would break such a tie by matching the clinician to the CBSA or metropolitan division that has the highest total risk-adjusted spending across all episodes assigned to each CBSA or metropolitan division. If a second tie break is needed, we would match the clinician to the CBSA or metropolitan division that has episodes with the more recent dates. For example, if a clinician has an equal number of episodes in CBSA-B and CBSA-C, but the episodes in CBSA-B collectively have a higher total risk-adjusted spending compared to all episodes in CBSA-C, then the clinician would be matched to CBSA- B. We seek comments on our proposed process at Sec. 512.710(f)(4) for determining the CBSA or metropolitan division of a clinician for each ASM performance year using EBCM data for the purposes of determining whether a clinician is located within a mandatory geographic area for each ASM performance year. (5) Proposed Selection and Notification Process for ASM Participants We propose to identify ASM participants on an annual basis. At Sec. 512.710(g) we propose to identify all clinicians furnishing covered services in accordance with the ASM participant eligibility criteria specified in section III.C.2.c.(3) of this proposed rule using applicable data from 2 calendar years prior to each ASM performance year. We also propose that a clinician selected for participation for any ASM performance year would be considered an ASM participant for the remainder of the model. We propose at Sec. 512.710(g)(1)(i), for the 2027 ASM performance year/2029 ASM payment year only, to identify preliminarily eligible ASM participants using the ASM participant eligibility criteria and applicable data from calendar year 2024. If ASM is finalized as proposed, we propose to make public the preliminarily eligible ASM participants in a form and manner determined by CMS. We expect to release this information by the end of CY 2025. Then, to finalize the ASM participants for the 2027 ASM performance year/2029 ASM payment year, we propose Sec. 512.710(g)(1)(ii) to confirm that the preliminarily eligible ASM participants continue to meet the ASM participant eligibility criteria using more recent data from calendar year 2025. We propose to make public the selected ASM participants for the 2027 ASM performance year/2029 ASM payment year in a form and manner determined by CMS. We expect to release this information by the end of July 2026, preceding the start of the 2027 ASM performance year/ 2029 ASM payment year. We believe that notifying preliminarily eligible ASM participants well before the start of the first ASM performance year in 2027 would provide ample time to become familiar with ASM requirements, make practice adjustments, and prepare for reporting of the required measures and data. We considered not releasing the preliminarily eligible ASM participants for the 2027 ASM performance year/2029 ASM payment year and, instead, only using applicable data from the 2025 calendar year to identify the final ASM participants for the 2027 ASM performance year/ 2029 ASM payment year. However, this alternative would provide less time for ASM participants to prepare for the first ASM performance year and potentially increase the operational burden for clinicians selected for the model. If ASM is finalized, as proposed, for each ASM performance year, beginning with the 2028 ASM performance year/2030 ASM payment year, we propose at Sec. 512.710(g)(2)(i) to confirm that ASM participants continue to meet ASM participant eligibility criteria for the upcoming ASM performance year/ASM payment year using applicable data from the calendar year 2 years prior to the applicable ASM performance year. If an ASM participant does not meet the ASM participant eligibility criteria for the upcoming ASM performance year, then they would not be required to participate in ASM for the applicable ASM performance year and would not need to meet applicable reporting requirements of ASM. Further, waivers, including the MIPS waiver, described at Sec. 512.775 would no longer apply to the ASM participant, and the ASM participant must participate in MIPS if applicable. Beginning with the 2028 ASM performance year/2030 ASM payment year, we propose at Sec. 512.710(g)(2)(ii) to identify additional clinicians not previously identified as ASM participants but who meet the ASM participant eligibility criteria at Sec. 512.710(b) for the upcoming ASM performance year/ASM payment year using data from the calendar year 2 years prior to the applicable ASM performance year. We propose that CMS would make public the ASM participants for a given ASM performance year annually in a form and manner determined by CMS. We intend to release this information by the end of July in the year preceding the start of the applicable ASM performance year. We believe that the proposed approach of annually identifying clinicians who meet the ASM participant eligibility criteria would ensure we are accurately selecting ASM participants. That is, we would ensure that ASM participants continue to be of the required specialty type and meet the EBCM episode volume thresholds year-over-year. This proposed approach to selecting ASM participants also allows us to account for movement of ASM participants to different practices within mandatory geographic areas and allows new ASM participants into the model over the ASM test period. We also believe that this approach would allow ASM to maintain an appropriate number of ASM participants over the ASM test period to produce a reliable model test. We considered an alternative approach of establishing a fixed list of ASM participants for all ASM performance years. Under this alternative, we would first identify ASM participants as clinicians that meet the ASM participant eligibility criteria using applicable data from the 2024 calendar year for the 2027 ASM performance year/2029 ASM payment year and release a list of preliminarily eligible ASM participants. We would then finalize the ASM participants for the 2027 ASM performance year/2029 ASM payment year using applicable data from the 2025 calendar year. Beginning in the 2028 ASM performance year/2030 ASM payment year, we would reconfirm that the final ASM participants identified for the 2027 ASM performance year/2029 ASM payment year continue to meet the ASM participant eligibility criteria for each ASM performance year thereafter using applicable data from 2 calendar years before the applicable ASM performance year. Under this alternative, we would not identify new ASM participants over the course of the ASM model test period. Repeatedly reconfirming that the initial ASM participants continue to meet ASM participant eligibility criteria for each ASM performance year would result in attrition of any ASM participant who changes their association with a practice (that is, assigns billing rights to a different TIN) after the first ASM performance year based on our proposed identification of [[Page 32573]] ASM participants at the TIN/NPI level. Accordingly, we believe that this alternative fixed-list approach would reduce the number of ASM participants over the ASM test period and the magnitude of this potential decrease could undermine the reliability of the model test. We seek comments on our proposed approach for selecting and notifying ASM participants at Sec. 512.710(g). We also seek comment on only identifying the final ASM participants for the 2027 ASM performance year/2029 ASM payment year using applicable data from the 2025 calendar year and the use of a fixed list of ASM participants for all ASM performance years. d. Proposed ASM Performance Assessment Approach, Data Submission Requirements, and ASM Performance Category Requirements and Scoring As discussed earlier in section III.C.1.b. of this proposed rule, we propose to use the MVP framework, including its performance categories, to assess ASM participant performance related to improving quality of care and reducing low-value care related ASM targeted chronic conditions. We believe this framework offers a tested performance assessment framework to use in creating value-based incentives for ASM participants. In this section of this proposed rule, we discuss the performance measures and activities that would be used to assess the performance of ASM participants in four ASM performance categories of (1) quality, (2) cost, (3) improvement activities, and (4) Promoting Interoperability. We propose to define at Sec. 512.705 ``ASM performance category'' as a group of applicable measures or activities used to assess an ASM participant's performance on quality, cost, improvement activities, or Promoting Interoperability. Tying a clinician's performance to certain measures and activities (as discussed below) in these performance categories would support ASM goals, as discussed in section III.C.1 of this proposed rule, of decreasing the cost of care for beneficiaries with ASM's targeted chronic conditions as well as improving quality care as measured through a focused measure set relevant to ASM's clinical specialties and targeted chronic conditions. The quality ASM performance category would assess the quality of care ASM participants delivered by measuring health care processes, outcomes, and patient experiences of care with the goal of improving the quality of care for beneficiaries with ASM's targeted chronic conditions. The cost ASM performance category would assess the efficiency and cost-effectiveness of care provided to Medicare beneficiaries with ASM targeted chronic conditions with the goal of providing more cost-efficient care to generate cost savings. The improvement activities ASM performance category would assess ASM participants in their efforts to make practice improvements that improve population health, enhance patient experiences and outcomes, reduce cost of care, and improve clinician experience. To meet ASM's practice improvement goals, ASM's improvement activities would incentivize practice improvements that would strengthen care management and processes related to ASM's targeted chronic conditions, and incentivize stronger integration between specialist and primary care providers. The Promoting Interoperability ASM performance category would assess ASM participants in their efforts to promote patient engagement and electronic exchange of information using CEHRT to enhance quality of care and reduce costs through more effective upstream chronic condition management and care integration related to ASM's targeted chronic conditions. Under ASM, CEHRT should meet the requirements set forth in Sec. 414.1305, except all instances of references to MIPS are to be replaced with references to ASM. As further discussed below in section III.C.2.d.(2) of this proposed rule, we propose for the quality ASM performance category, cost ASM performance category, and promoting interoperability ASM performance category, to draw measures and activities from specific MVPs related to each of ASM's targeted chronic conditions to identify a cohesive set of vetted and clinically relevant measures and activities that would allow us to appropriately assess ASM participants on the care they deliver related to ASM's targeted chronic conditions. Using the same measures would mean the many ASM participants would already be familiar with required measures and activities proposed in each of the ASM performance categories. proposed in these ASM performance categories. However, as we discuss in sections III.C.2.d.(1) and III.C.2.f of this proposed rule, comparing performance on these measures and activities as measured by ASM performance category and final scores within each ASM cohort would result in payment adjustments based on direct peer-to-peer comparisons of similar specialists. For some ASM performance categories, we propose to include measures from outside of the relevant MVP, such as from the broader inventory of MIPS measures, when we believe there is a clinically justifiable rationale for including such a measure. We propose ASM-specific measures or activities in limited circumstances when we believe there is rationale for assessing performance or creating an incentive for practice improvement specific to ASM's targeted chronic conditions. For example, the improvement activities ASM performance category, as discussed in section III.C.2.d.(4). of this proposed rule, includes ASM-specific improvement activities. We also discuss how we propose to score each ASM performance category within each of the ASM performance category sections within this section of this proposed rule. While many of the proposed scoring policies draw from MIPS, we are proposing scoring policies that simplify some existing policies. As a mandatory model, simplification of scoring compared to some MIPS and MVP policies would make it easier for the ASM participant to understand how their performance in each of the ASM performance categories contributes to their final score and resulting payment adjustment. As part of this simplification, our proposed scoring policies ensure that each ASM participant would at minimum be measured on quality and cost, with further scoring adjustments based on performance in the improvement activities and Promoting Interoperability ASM performance categories, to determine payment adjustments. As discussed in section III.C.2.e of this proposed rule, we plan to calculate a final score based on the quality, cost, improvement activities, and Promoting Interoperability performance categories scores for each ASM participant for each ASM performance year. The scores in the quality and cost ASM performance categories would positively impact the ASM final score while performance in the improvement activities and Promoting Interoperability ASM performance categories could result in negative scoring adjustments to the ASM final score. In the following section III.C.2.d.(1).(a) of this proposed rule, we first discuss the ASM performance assessment approach. We then propose data submission requirements applicable across the ASM performance categories in section III.C.2.d.(1).(b) of this proposed rule. Finally, we propose specific requirements and scoring policies for each of the four ASM performance categories in sections [[Page 32574]] III.C.2.d.(2) through III.C.2.d.(5). of this proposed rule. (1) Proposed Performance Assessment and Data Submission Requirements (a) ASM Performance Categories We propose at Sec. 512.715(a)(1) through (3) that CMS uses the performance measures and activities described under Sec. Sec. 512.725(b) and (c), 512.730(b), 512.735(b), and 512.740(b) to assess ASM participants in the quality, cost, improvement activities, and Promoting Interoperability ASM performance categories. As discussed in section III.C.1 of this proposed rule, we believe that these ASM performance categories taken together would improve the quality of care and produce cost savings related to ASM's chronic conditions. Further, we believe that, taken together, the ASM performance categories provide a comprehensive understanding of an ASM participant's management of their beneficiaries' targeted chronic conditions. We also believe that ASM participants, because of participation in other CMS programs including MIPS, would already be familiar with reporting (1) quality; (2) cost; (3) improvement activities; and (4) Promoting Interoperability performance categories to determine a final score. This proposed structure is similar to the performance assessment approach of other CMS programs like the MIPS reporting option of the Quality Payment Program. MIPS assesses the performance of MIPS eligible clinicians across four performance categories and then determines a MIPS payment adjustment factor that applies to the clinician's Medicare Part B payments for covered professional services finalized at Sec. Sec. 414.1380(a) and 414.1405(a) and as defined at Sec. 414.1305. Under the proposed ASM performance categories, the value of care provided to chronic care patients would be assessed through performance in the quality and cost performance categories, supported by performance in the improvement activities and Promoting Interoperability performance categories. Measures and activities CMS selects to assess an ASM's performance across the quality ASM performance category and cost ASM performance category would assess the value of care directly furnished to chronic care patients. Measuring ASM participants' cost and quality performance ensures that Medicare beneficiaries are receiving clinically appropriate, comprehensive, high-value care. The measurement of cost and quality is essential to measuring the value of care provided to Medicare beneficiaries with chronic conditions. The improvement activities ASM performance category incentivizes care coordination and collaboration between specialty medicine and primary care, creating new opportunities for both groups playing vital roles in care management and coordination. And lastly, the Promoting Interoperability ASM performance category enables meaningful EHR use, the reporting of clinical quality measures, including electronic clinical quality measures (eCQMs) and continuous practice-based quality improvement and care transformation. We believe that ASM's more targeted approach to performance assessment where we would evaluate ASM participants within each ASM cohort across the ASM performance categories--(1) on a set of relevant performance measures that they are required to report; and (2) among clinicians furnishing similar sets of services, would produce final scores and subsequent payment adjustments, as described in section III.C.2.f of this proposed rule, that are more reflective of clinician performance. A more targeted approach to measurement would also offer more insight into how clinical decisions and processes, such as care coordination, affect patient outcomes. We believe this insight is necessary to support and incentivize accountable care, increasing beneficiary access to coordinated specialty care. Furthermore, equipped with more specialty-relevant performance information through participation in ASM, we expect clinicians would be more likely to invest resources in pursuit of better outcomes, reducing the incidence of poor outcomes arising from care fragmentation, ultimately resulting in better care for patients. We propose at Sec. 512.715(a) that, as further described in Sec. Sec. 512.725, 512.730, 512.735, and 512.740, ASM participants would receive a specific number of points for their performance on each measure or activity within an ASM performance category. CMS assigns the total number of points that a measure or activity may receive. The total score across all four performance categories that an ASM participant may receive is capped at 100 points. The number of points awarded for an ASM's performance on a measure or activity corresponds to the level of performance, the higher the points, the better the performance. We propose to define at Sec. 512.705 ``ASM performance category score'' as the assessment of each ASM participant's performance on the applicable measures and activities for a performance category during an ASM performance year based on the policies proposed at Sec. Sec. 512.715, 512.725, 512.730, 512.735, and 512.740. As further described below in this section of this proposed rule, CMS would, using an ASM participant's ASM performance category scores across all ASM performance categories, calculate an ASM participant's final score for an ASM performance year/ASM payment year in accordance with Sec. 512.745. We propose at Sec. 512.715(b)(1) to use Medicare claims data and administrative data to calculate some measures included in the quality and cost ASM performance categories under Sec. Sec. 512.725 and 512.730. We propose at Sec. 512.715(b)(2) that we use other model- specific data reported by ASM participants to calculate measure or activity scores for the quality, improvement activities, and Promoting Interoperability ASM performance categories under Sec. Sec. 512.725, 512.735, and 512.740. We are soliciting feedback from the public on our proposal to assess ASM participant performance across four ASM performance categories: (1) quality; (2) cost; (3) improvement activities; and (4) promoting interoperability. We seek comments on our proposal at Sec. 512.715(a) to set and assign specific points on measures or activities in each ASM performance category and to calculate a final score using point received across all four ASM performance categories as described at Sec. 512.745. Finally, we seek comments on our proposal at Sec. 512.715(b) to use Medicare claims, administrative data, and model- specific data reported by an ASM participant to calculate measure or activity scores used to calculate ASM performance category scores. (b) Data Submission Requirements We propose at Sec. 512.720 that ASM participants would be required to submit data on the measures and activities for the quality, improvement activities, and Promoting Interoperability ASM performance categories in accordance with each ASM performance categories described in Sec. Sec. 512.725, 512.735, and 512.740. As further discussed below, we are proposing to align some data submission requirements under this model with the data submission requirements under MIPS as defined at Sec. 414.1325. We believe that the use of similar processes and ``submission types''--which we propose to define at Sec. 512.705 as the mechanism by which the ASM submitter submits data to us in the form and manner specified by us, including, but not limited to: (1) direct; [[Page 32575]] (2) log in and upload; and (3) log in and attest--would limit confusion and burden for those ASM participants that have previously participated in MIPS. We also intend to provide further resources on the exact data submission procedures prior to the first data submission deadline for the 2027 ASM performance year. We propose that ASM participants must submit data at the same level at which they are identified in the model. Since we propose identifying ASM participants at the TIN/NPI level (as outlined in section III.C.2.c.(3).(a).(i). of this proposed rule), we are likewise proposing that each ASM participant would be required to submit data for each ASM performance category at this same TIN/NPI level, unless specifically stated otherwise within the requirements for a particular performance category. Alignment between participant identification and data submission levels is necessary for a mandatory model and supports our goal of making accurate comparisons between similar participants. This approach differs from MIPS, which offers various reporting options (such as group, subgroup, or APM entity as defined in Sec. 414.1305). We have determined that allowing multiple reporting configurations would undermine ASM's design objective of creating clear peer-to-peer performance comparisons for determining payment adjustments. We recognize that some of the required measures and attestations in each ASM performance category may reflect practice-level activities. We, therefore, considered whether to allow submission of required measures and attestations for the improvement activities and Promoting Interoperability ASM performance categories at the TIN level. We believe that it is more appropriate to align the data submission level across all the ASM performance categories instead of having some ASM performance categories with data submitted at the TIN/NPI level and others at the TIN level. Alignment of submission level across all ASM performance categories supports our goal of making like-to-like performance comparisons to determine payment adjustments. We are proposing the following data submission requirements at Sec. 512.720(a)(1)(i) through (iii) (the order of the requirements aligns with the order in which similar data submission requirements for MIPS appear in Sec. 414.1325): Quality ASM performance category data submission requirements. For the quality ASM performance category, we propose at Sec. 512.720(a)(1)(i) that an ASM participant must report at least one required quality measure that is not an administrative claims-based collection type (discussed in sections III.C.2.d.(2).(b) and III.C.2.d.(2).(c) of this proposed rule) and meets the proposed data completeness requirement as discussed in section III.C.2.d.(2).(h).(i) of this proposed rule. The proposed requirements for the quality ASM performance category are similar to those required under MIPS as defined at Sec. 414.1325(1)(i) but with the addition of meeting the data completeness requirement. We believe that the addition of the data completeness requirement ensures that we would have complete data by which to score at least one required quality measure. We also considered that an ASM participant must report complete data for at least two, at least three, or all required quality measures that are not administrative claims-based collection types as the data submission requirement for the quality ASM performance category. However, not reporting all required measures would negatively affect an ASM's participant quality ASM performance category score as discussed in section III.C.2.(d).(i) of this proposed rule. Further, not meeting the data submission requirement for the quality ASM performance category would mean that an ASM participant would receive the maximum negative payment adjustment for the applicable ASM payment year as discussed in section III.C.2.f.(4) of this proposed rule. Setting the minimum data submission requirement as reporting more than one complete quality measure could penalize ASM participants that are unable to report required measures because of extenuating circumstances. We believe that the proposed minimum data submission requirement combined with the proposed scoring policies would provide the appropriate incentive for reporting all required quality measures while ensuring that we can appropriately evaluate quality performance. Improvement activities ASM performance category data submission requirements. We propose Sec. 512.720(a)(1)(ii) that the data submission requirement for the improvement activities ASM performance category would require that an ASM participant attest to completing or not completing the required ASM improvement activities defined in Sec. 512.735. Unlike MIPS, we are not proposing to include a ``yes'' attestation to the minimum data submission requirements to receive a final score under ASM as defined in Sec. 512.745(b) as it would conflict with how we propose to factor in the ASM improvement activities performance category score into the final score as proposed at Sec. 512.745(a)(1)(iii). Promoting Interoperability ASM performance category data submission requirements. The proposed requirements for the Promoting Interoperability ASM performance category at Sec. 512.720(a)(1)(iii) align with the MIPS requirements as defined at Sec. 414.1325(1)(iii). ASM performance categories without data submission requirements. Like the cost performance category or administrative claims-based quality measures under MIPS, we propose at Sec. 512.720(a)(2) that there would be no data submission requirements for the cost ASM performance category or for quality measures that have an administrative claims-based collection type. Like MIPS, performance in the ASM cost performance category and on some quality, measures would be calculated using administrative claims data, which includes claims submitted with dates of service during the applicable ASM performance year that are processed no later than 60 days following the close of the applicable ASM performance year. Data submission types for ASM participants. We propose at Sec. Sec. 512.720(b)(1) and (2) that an ASM participant would, like an individual MIPS eligible clinician, be able to submit their ASM data using, for the quality ASM performance category, the direct, login and upload, submission types, and for improvement activities or Promoting Interoperability ASM performance categories, the direct, login and upload, or login and attest submission types as proposed at Sec. 512.720(b). These are the same submission types available under MIPS. Use of multiple data submission types. Like the policy established under MIPS, we propose at Sec. 512.720(c) that ASM participants would be permitted to submit their ASM data using multiple submission types for any performance category described at Sec. 512.720(b) as applicable; provided, however, that the ASM participant uses the same identifier for all ASM performance categories and all data submissions. Data submission deadlines. We propose at Sec. 512.720(d) that ASM participants would need to submit all required data and attestations as required for each ASM performance category by March 31 following the close of the applicable ASM performance year, or a later date as specified by CMS. This proposal aligns [[Page 32576]] with the deadline policy established under MIPS at Sec. 414.325(e). We considered requiring a data submission deadline earlier than March 31 but believed that it would not provide ASM participants with sufficient time to prepare their data submission. Treatment of multiple data submissions. Like the policy established under MIPS, for multiple data submissions received in the quality and improvement activities ASM performance categories, for an ASM participant submitters in multiple organizations (for example, qualified registry, practice administrator, or EHR vendor), we propose at Sec. 512.720(e) to calculate and score each submission received and assign the highest of the scores. We propose at Sec. 512.720(e)(1) that for multiple data submissions received for an individual ASM participant from one or multiple submitters in the same organization, we propose to score the most recent submission. We propose at Sec. 512.720(e)(2) that for multiple data submissions received for the Promoting Interoperability performance category, we propose to calculate a score for each data submission received and assign the highest of the scores. We also propose that data can be submitted on behalf of the ASM participant by an entity or individual designated to submit data to CMS, including a third-party intermediary as described in Sec. 512.720(a), on behalf of the ASM participant. We propose at Sec. 512.705 to use with the definition of third-party intermediary set forth in MIPS at Sec. 414.1305 to align the data submission policies for third party intermediaries between MIPS and ASM. We seek comments on the proposed data submission requirements and submission types for each ASM performance category, the data submission deadline, and the proposed treatment of multiple data submissions and scoring at Sec. 512.720. We also seek comments on our proposal to require data submission at the level by which we determine ASM participation. We also seek comments on the alternative data submission requirements for the quality ASM performance category that we considered. (2) Proposed Quality ASM Performance Category The proposed quality ASM performance category supports the model goals of improving quality of care with a focus on measures that are relevant to ASM clinical specialties and targeted chronic conditions. It also seeks to decrease the cost of care for beneficiaries with ASM- targeted chronic conditions. Measuring quality of care helps identify areas for improvement and ensures that clinical interventions are effective and lead to improved patient outcomes. The importance of the quality ASM performance category is reflected in the weight of the performance category on the final score, discussed in section III.C.2.e.(1) of this proposed rule. (a) Background We propose at Sec. 512.725(b) and (c) to use a quality measure set specific to each ASM cohort, one measure set for heart failure and one measure set for low back pain, which would contain condition-specific mandatory measures. Each ASM participant must report all measures specified in Table 39 for their applicable chronic condition, except for the proposed administrative claims-based measures, which would be calculated by CMS based on their submitted claims. These measures would likely stay consistent throughout the duration of the model to support reporting continuity, minimize burden, and ensure a reliable and valid model evaluation. The quality measurement approach in ASM is similar to the MVP reporting option under MIPS in that it limits reporting to a subset of clinically relevant measures. However, while the MVP reporting option allows a clinician to select an MVP and choose which MVP measures to report, the ASM participant would be required to report all quality measures in their respective ASM measure set. Medicare's payment landscape is continuing to transform, moving away from traditional FFS payments that are not tied to quality and towards value-based models with increased provider accountability. ASM is a continuation of these efforts, strengthening the connection between quality and payment. We aim, in payment models such as ASM, to utilize quality measures that incentivize evidence-based care and prevention, improve patient outcomes, and reduce low-value health care spending. We propose to avoid making significant changes to these measure sets over the period of model; however, we may propose to add or remove measures through rulemaking if we believe refinements to the measure set are necessary. We may propose to add or remove measures in response to relevant public comments, recommendations from participants and their collaborators, new CMS program activities, or significant changes to the included measures. We would use notice and comment rulemaking to propose any modifications, such as adding or removing measures for monitoring quality or calculating scores for quality performance. We seek comment on this proposal. As proposed, ASM is designed to provide financial incentives for measurable improvements in clinical outcomes for beneficiaries. We expect our quality measurement strategy to increase adherence to clinical guidelines, focus attention on outcomes to reduce costs, and enhance the patient experience. Several of the measures also promote prevention, as detailed in Table 39, by mitigating the progression of the chronic diseases that ASM targets and reducing the risk for other comorbid diseases that may exacerbate health issues. Each quality measure proposed contains measures that aim to measure and incentivize improvement in the following three domains: (1) excess utilization, (2) evidence-based care and outcomes, and (3) patient-reported outcomes and experience. Each measure set would include a utilization-focused measure to assess appropriate use of select services in chronic disease management. This measurement area may also indicate where excess or inappropriate utilization is occurring, which aligns with CMS priorities to reduce spending related to unnecessary care, imaging, or procedures. Measures in the evidence-based care and outcomes domain are clinically relevant to the conditions of focus, can meaningfully discern differences in care furnished by ASM participants, and are associated with improved outcomes for patients. Finally, measures related to patient-reported outcomes capture what matters most to patients, and incentivizing ASM participants to be more attuned to the patient experience could drive improvements in functional status among beneficiaries receiving treatment for heart failure and low back pain. We believe that the measures in all three domains are clinically relevant to the conditions of focus and would align with other CMS programs and nationwide measurement efforts. [[Page 32577]] [GRAPHIC] [TIFF OMITTED] TP16JY25.111 (i) Performance Year for the Quality ASM Performance Category We propose at Sec. 512.725(a) that the ASM performance year for quality measures would be the full calendar year from January 1 to December 31, and the performance year would occur 2 years prior to an applicable ASM payment year. We believe that setting the ASM performance year for quality measures in this way aligns with MIPS as defined at Sec. 414.1320 and would be easily adoptable for ASM participants. We seek comments on our proposed approach setting the ASM performance year for quality measures. (b) Quality Measure Set for the ASM Heart Failure Cohort We propose at Sec. 512.725(b)(1) through (5) to include the following measures in the heart failure measure set. Each ASM heart failure participant must report each measure using one of the collection types specified in Table 39. (i) Risk-Standardized Acute Unplanned Cardiovascular-Related Admission Rates for Patients With Heart Failure (HF) (MIPS Q492) We propose to include Risk-Standardized Acute Unplanned Cardiovascular-Related Admission Rates for Patients with Heart Failure (HF) (MIPS Q492) in the ASM heart failure measure set. By assessing potentially preventable cardiovascular-related hospital admissions, this measure incentivizes clinicians to adopt evidence-based practices in heart failure management, improve care coordination, and enhance the overall quality of care. A hospital readmission, for any reason, is disruptive to patients and caregivers, costly to the health care system, and puts patients at additional risk of hospital-acquired infections and complications.\138\ Readmissions are also a major source of patient and family stress and may contribute substantially to a decline in functional ability, particularly in older patients.\139\ Some readmissions are unavoidable and result from inevitable progression of disease or worsening of chronic conditions. Patients with heart failure, particularly those at a more advanced stage, are vulnerable to a range of factors that may increase their risk for cardiovascular-related hospitalizations.\140\ Risk of hospitalization may be related to an individual's clinical and social/community risk factors but may also be affected by the quality of care received. Activities that could improve quality of care include the adoption of guideline-directed medical therapy, early intervention for acute symptoms, optimal care coordination across providers, and support for self-management. Policy changes, such as the Medicare Hospital Readmissions Reduction Program, have led to a decrease in readmission rates for both principal and secondary heart failure hospitalizations; however, readmission rates in both groups remain high.\141\ We propose to include this measure to continue the momentum on reducing avoidable hospital admissions and readmissions, as well as improve overall [[Page 32578]] quality of care for Medicare patients with heart failure. --------------------------------------------------------------------------- \138\ Dhaliwal JS, Dang AK. Reducing Hospital Readmissions. Nih.gov. Published June 7, 2024. https://www.ncbi.nlm.nih.gov/books/NBK606114/. \139\ Dhaliwal JS, Dang AK. Reducing Hospital Readmissions. Nih.gov. Published June 7, 2024. https://www.ncbi.nlm.nih.gov/books/NBK606114/. \140\ Malhotra C, Chaudhry I, Yeo Khung Keong, Sim D. Multifactorial risk factors for hospital readmissions among patients with symptoms of advanced heart failure. ESC heart failure. 2024;11(2):1144-1152. doi:https://doi.org/10.1002/ehf2.14670. \141\ Blecker S, Herrin J, Li L, Yu H, Grady JN, Horwitz LI. Trends in Hospital Readmission of Medicare-Covered Patients With Heart Failure. Journal of the American College of Cardiology. 2019;73(9):1004-1012. doi:https://doi.org/10.1016/j.jacc.2018.12.040. --------------------------------------------------------------------------- In addition, this measure aligns with other quality programs, such as the Quality Payment Program, which includes the measure in the Advancing Care for Heart Disease MVP. Another benefit of the measure is that it is calculated using administrative claims, which reduces reporting burden for the ASM participant. Furthermore, ASM proposes to use this measure at the TIN/NPI level. We plan to pursue additional testing and analyses to ensure measure validity at this level. To date, this measure has been validated at the TIN level in the MIPS program. Analyses have determined a certain threshold of attributed patients' needs to be met to ensure measure validity; this threshold can be challenging to achieve at the TIN/NPI level in MIPS given the wide range of specialty types that participate. Internal analyses indicate that, given the 20 EBCM episode threshold for participation of cardiologists described in section III.C.2.c.(3)(b) of this proposed rule, meeting this threshold of attributed patients in ASM would not be a significant issue or threat to measure validity. For that reason, we anticipate this measure would be valid and reliable at the TIN/NPI level for ASM participants treating heart failure. We seek comment on the proposal to include the Risk-Standardized Acute Unplanned Cardiovascular-Related Admission Rates for Patients with HF (MIPS Q492) measure in ASM and to assess performance at the TIN/NPI level. (ii) Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD) (MIPS Q008) We propose to include Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD) (MIPS Q008) in the ASM heart failure measure set. This measure aims to promote the appropriate use of beta-blocker therapy in select patients with heart failure with reduced ejection fraction (HFrEF). It assesses the percentage of patients aged 18 years and older with a diagnosis of heart failure with a current or prior left ventricular ejection fraction (LVEF) <= 40 percent who were prescribed beta-blocker therapy either within a 12- month period of being seen in the outpatient setting or at each hospital discharge. Beta-blockers, especially when delivered as part of guideline-directed medical therapy, decrease the risk of major cardiovascular events, reduce mortality and hospitalization in patients with HFrEF, lessen the symptoms of heart failure, improve the clinical status of these patients, and reduce future clinical deterioration associated with heart failure.\142\ These improvements are observed in all populations with heart failure of various etiologies, such as patients with or without coronary artery disease (CAD), patients with or without diabetes, older patients, as well as women and across various racial and ethnic groups.\143\ --------------------------------------------------------------------------- \142\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. \143\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. --------------------------------------------------------------------------- Despite its survival benefits, use of beta blockers in eligible patients remains suboptimal.144 145 Nonadherence to medications prescribed for heart failure, including beta-blockers, can be associated with adverse outcomes such as hospital readmission and mortality.146 147 By including this measure, we aim to increase the appropriate use of beta-blocker therapy in eligible patients with heart failure. This aligns with the goals of ASM to drive improvements in the quality of care delivered to heart failure patients, particularly in evidence-based pharmacotherapy. In addition, inclusion of this measure aligns with other quality programs, such as the Quality Payment Program, which includes the measure in the Advancing Care for Heart Disease MVP, and the Cardiology Core Quality Measures Collaborative (CQMC) set. We seek comment on the proposal to include Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD) (MIPS Q008) in the ASM heart failure measure set. --------------------------------------------------------------------------- \144\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. \145\ Kim SE, Byung Su Yoo. Treatment Strategies of Improving Quality of Care in Patients With Heart Failure. Korean circulation journal. 2023;53. doi:https://doi.org/10.4070/kcj.2023.0024. \146\ Ruppar TM, Cooper PS, Mehr DR, Delgado JM, Dunbar[hyphen]Jacob JM. Medication Adherence Interventions Improve Heart Failure Mortality and Readmission Rates: Systematic Review and Meta[hyphen]Analysis of Controlled Trials. Journal of the American Heart Association. 2016;5(6). doi:https://doi.org/10.1161/jaha.115.002606. \147\ Ho PM, Magid DJ, Shetterly SM, et al. Medication nonadherence is associated with a broad range of adverse outcomes in patients with coronary artery disease. American Heart Journal. 2008;155(4):772-779. doi:https://doi.org/10.1016/j.ahj.2007.12.011. --------------------------------------------------------------------------- (iii) Heart Failure (HF): Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) or Angiotensin Receptor- Neprilysin Inhibitor (ARNI) Therapy for Left Ventricular Systolic Dysfunction (LVSD) (MIPS Q005) We propose to include Heart Failure (HF): Angiotensin-Converting Enzyme (ACEi) Inhibitor or Angiotensin Receptor Blocker (ARB) or Angiotensin Receptor-Neprilysin Inhibitor (ARNI) Therapy for Left Ventricular Systolic Dysfunction (LVSD) (MIPS Q005) in the heart failure measure set. This measure assesses the appropriate use of the specified medicines in patients with heart failure with reduced LVEF. Adherence to this class of medications, especially as part of guideline-directed medical therapy, offers cardioprotective benefits in patients with heart failure and reduces mortality and heart failure- related hospitalizations.148 149 Furthermore, McMurray et al. in PARADIGM-HF showed use of angiotensin receptor-neprilysin inhibitor compared to enalapril, an ACEi, not only reduced risk for cardiovascular death and hospitalization related to heart failure, but also decreased the symptoms and physical limitations of heart failure.\150\ Similar to beta blockers, optimal dosing and adherence to this group of medication in heart failure patients remains suboptimal.\151\ By including this measure, we can incentivize cardiologists participating in the ASM to prescribe evidence-based pharmacotherapy for patients with HFrEF. In addition, inclusion of this measure aligns with other quality measurement efforts, such as the Advancing Care for Heart Disease MVP in the Quality Payment Program and the Cardiology Core Quality Measures Collaborative (CQMC) set. We seek [[Page 32579]] comment on the appropriateness of including this measure in the heart failure measure set. --------------------------------------------------------------------------- \148\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. \149\ D[uuml]sing R. Mega clinical trials which have shaped the RAS intervention clinical practice. Therapeutic Advances in Cardiovascular Disease. 2016;10(3):133-150. doi:https://doi.org/10.1177/1753944716644131. \150\ McMurray JJV, Packer M, Desai AS, et al. Angiotensin- Neprilysin Inhibition versus Enalapril in Heart Failure. New England Journal of Medicine. 2014;371(11):993-1004. doi:https://doi.org/10.1056/nejmoa1409077. \151\ Kim SE, Byung Su Yoo. Treatment Strategies of Improving Quality of Care in Patients With Heart Failure. Korean circulation journal. 2023;53. doi:https://doi.org/10.4070/kcj.2023.0024. --------------------------------------------------------------------------- (iv) Controlling High Blood Pressure (MIPS Q236) We propose including Controlling High Blood Pressure (MIPS Q236) in the heart failure measure set for ASM because optimal blood pressure management is a critical part of heart failure management and uncontrolled blood pressure can contribute to complications and progression.152 153 For example, severe hypertension can result in pulmonary edema (more common in patients with preserved LVEF), requiring urgent treatment to reduce blood pressure.\154\ Controlling blood pressure helps reduce the risk of adverse outcomes, such as hospitalizations and mortality related to heart failure.155 156 By including this measure, ASM incentivizes cardiologists to optimize blood pressure control, particularly given that patients with heart failure very commonly have a history of hypertension.\157\ In addition, this measure complements the two other quality measures for heart failure in ASM, as the use of beta blockers and ACEi/ARB/ARNIs also have favorable effects on heart failure outcomes and lower blood pressure.\158\ The complimentary emphasis on blood pressure control and medication management in this measure set may also slow disease progression and function as a form of tertiary prevention in heart failure patients. Furthermore, its inclusion in other quality measure sets, such as the CMS Universal Foundation Measure Set and the Cardiology Core Quality Measures Collaborative (CQMC) set has resulted in more widespread adoption, helping streamline reporting and reduce burden.\159\ We seek comment on our inclusion of this measure in the heart failure quality measure set. --------------------------------------------------------------------------- \152\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. \153\ Oh GC, Cho HJ. Blood pressure and heart failure. Clinical Hypertension. 2020;26(1). doi:https://doi.org/10.1186/s40885-019-0132-x. \154\ Ratko Lasica, Lazar Djukanovic, Jovanka Vukmirovic, et al. Clinical Review of Hypertensive Acute Heart Failure. Medicina (Kaunas Spausdinta). 2024;60(1):133-133. doi:https://doi.org/10.3390/medicina60010133. \155\ The SPRINT Research Group. A Randomized Trial of Intensive versus Standard Blood-Pressure Control. New England Journal of Medicine. 2015;373(22):2103-2116. doi:https://doi.org/10.1056/nejmoa1511939. \156\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. \157\ Messerli FH, Rimoldi SF, Bangalore S. The Transition From Hypertension to Heart Failure. JACC: Heart Failure. 2017;5(8):543- 551. doi:https://doi.org/10.1016/j.jchf.2017.04.012. \158\ Oh GC, Cho HJ. Blood pressure and heart failure. Clinical Hypertension. 2020;26(1). doi:https://doi.org/10.1186/s40885-019-0132-x. \159\ Jacobs DB, Schreiber M, Seshamani M, Tsai D, Fowler E, Fleisher LA. Aligning Quality Measures across CMS--The Universal Foundation. New England Journal of Medicine. 2023;388(9). doi:https://doi.org/10.1056/nejmp2215539. --------------------------------------------------------------------------- (v) Functional Status Assessments for Heart Failure (MIPS Q377) We propose including Functional Status Assessments for Heart Failure (MIPS Q377) in the heart failure measure set in ASM because patients with heart failure often experience poor functional status and health-related quality of life, both of which tend to decline as the disease progresses. Assessing functional status is crucial for managing the complex health needs of patients who often have multiple comorbidities. Furthermore, standardized assessment of patient-reported health status using a validated questionnaire can be useful for providing incremental information related to patient functional status and prognosis. It is also an independent predictor of hospitalization and mortality.\160\ The measure emphasizes the importance of collecting relevant patient-reported health status from heart failure patients, such as functional limitations, symptom burden, and quality of life. It supports the creation of a dynamic conversation between patients and providers regarding care goals and priorities, which we believe can facilitate shared decision-making, empower patients, and incentivize clinicians to incorporate patient voice and lived experience in clinical care activities. This measure is appropriate for ASM as it encourages cardiologists to regularly assess, monitor, and help improve the functional status of their heart failure patients, which are crucial for providing patient-centered care and aligning treatment plans with individual goals and priorities. In addition, this measure aligns with other quality measurement efforts, such as the Advancing Care for Heart Disease MVP in the Quality Payment Program and the Cardiology Core Quality Measures Collaborative (CQMC) set. We seek comment on our inclusion of this measure in the heart failure quality measure set. --------------------------------------------------------------------------- \160\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. --------------------------------------------------------------------------- We note that the Functional Status Assessments for Heart Failure (MIPS Q377) measure is currently a process measure. We propose that the process measure would be included for the 2027 ASM performance year, while we explore the benefit and applicability of developing a Patient--patient-reported outcome-based performance measure (PRO-PM). The current measure ensures a functional status assessment is completed. A PRO-PM would hold the ASM participant accountable for not only collecting patient-reported data but also improving or slowing progression of decline in functional status over time. We believe this would capture more meaningful changes in patient care. We seek comments on our proposal to include the Functional Status Assessments for Heart Failure (MIPS Q377) measure in ASM, the applicability of the measure as a PRO-PM, and whether the PRO-PM, if available, should be included in the heart failure measure set for future performance years of ASM. (c) Quality Measure Set for the ASM Low Back Pain Cohort We propose at Sec. 512.725(c)(1) through (5) to include the following measures in the low back pain measure set. Each ASM low back pain participant must report each measure using one of the collection types specified in Table 39. (i) Magnetic Resonance Imaging (MRI) Lumbar Spine for Low Back Pain, Respecified To Be Relevant to ASM Participants Treating Low Back Pain We propose to include a respecified MRI Lumbar Spine for Low Back Pain measure in the low back pain measure set. We believe this administrative claims-based measure can effectively assess overuse and hopefully incentivize reductions in inappropriate MRI imaging for low back pain. Routine imaging (such as MRI) is not recommended for patients with non-specific low back pain in the absence of certain clinical indicators with concerning features.\161\ However, studies have shown that a significant proportion of patients with low back pain undergo imaging, often within the first few weeks of symptom onset, [[Page 32580]] despite the lack of clear indication.\162\ Overuse of imaging for low back pain can lead to unnecessary health care costs and potential patient harm from incidental findings that may prompt further unnecessary testing or procedures.163 164 By including this measure in the low back pain measure set, ASM aims to incentivize adherence to evidence-based guidelines and a reduction of unnecessary MRIs for patients with uncomplicated low back pain, particularly in the initial stages of evaluation and management. We believe this could also have a positive impact on patient experience as it reduces time spent at medical appointments and health care costs. Furthermore, as an administrative claims measure, ASM participants would not have to report data for this measure, reducing reporting burden. --------------------------------------------------------------------------- \161\ North American Spine Society. Clinical Guidelines for Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back Pain. North American Spine Society; 2020. https://www.spine.org/Portals/0/assets/downloads/ResearchClinicalCare/Guidelines/LowBackPain.pdf \162\ Medicare Payment Advisory Commission. Health Care Spending and the Medicare Program: A Data Book. Medicare Payment Advisory Commission; July 2021. Accessed [insert access date]. https://www.medpac.gov/wp-content/uploads/2021/10/July2021_MedPAC_DataBook_Sec7_SEC.pdf. \163\ Litkowski PE, Smetana GW, Zeidel ML, Blanchard MS. Curbing the Urge to Image. The American Journal of Medicine. 2016;129(10):1131-1135. doi:https://doi.org/10.1016/j.amjmed.2016.06.020. \164\ Chou R. Diagnostic Imaging for Low Back Pain: Advice for High-Value Health Care From the American College of Physicians. Annals of Internal Medicine. 2011;154(3):181. doi:https://doi.org/10.7326/0003-4819-154-3-201102010-00008. --------------------------------------------------------------------------- MRI Lumbar Spine for Low Back Pain measure was specified for use in Hospital Outpatient Departments at the facility level and was previously included in the Hospital Outpatient Quality Reporting Program (HOQRP) as OP-8 (73 FR 68766).\165\ Part of our re- specification efforts would involve ensuring validity and reliability at the TIN/NPI level. We are also exploring the denominator criteria of the measure and potentially redefining the denominator. This potential change is pending further internal analyses to determine whether participants would be able to meet denominator minimum and specification changes and ensure the measure accurately identifies unwarranted MRI usage. We would propose the measure's specifications through notice and comment rulemaking when available and in advance of using the measure in the low back pain cohort. --------------------------------------------------------------------------- \165\ Hospital Outpatient Quality Reporting Partnership for Quality Measurement. P4qm.org. Published 2025. Accessed April 23, 2025. https://p4qm.org/taxonomy/term/216. --------------------------------------------------------------------------- We seek comment on the re-specification and inclusion of MRI Lumbar Spine for Low Back Pain measure in the low back pain measure set. (ii) Use of High-Risk Medications in Older Adults (MIPS Q238) We propose to include the Use of High-Risk Medications in Older Adults (MIPS Q238) measure in the low back pain quality measure set. Older adults with low back pain who receive a prescription for a high- risk medication as part of their treatment plan, may have a range of adverse events, including medication side effects, drug interactions, a prescribing cascade, or hospitalization. Individuals ages 65 and older are more likely to have multiple chronic conditions, increasing their risk for adverse drug effects associated with polypharmacy.\166\ Forty percent of individuals 65 and older filled at least one prescription for a potentially inappropriate medication and 13 percent filled two or more, leading to as much as $7.2 billion spent per year on inappropriate medications in older adults167 168 Several of the medications included in the measure are prescribed for treatment of musculoskeletal conditions and pain, such as skeletal muscle relaxants and tricyclic antidepressants.169 170 171 Skeletal muscle relaxants may be prescribed as an alternative to conventional pain medication; however, they carry considerable risk of falls and associated morbidity due to common side effects of dizziness, drowsiness, and hypotension. One study found that elderly patients who were using skeletal muscle relaxants were 2.25 times more likely to visit the emergency room for a fall or fracture than elderly patients who weren't prescribed these medications.\172\ Similarly, a meta- analysis exploring the risks associated with use of tricyclic antidepressants in elderly patients found a significant increased risk of falls and fracture.\173\ In addition to the morbidity and substantial costs associated with falls in the older adult population, falls in a patient with low back pain could significantly worsen their condition and functional status. We believe including this measure in the low back pain measure set could encourage ASM participants to be more cautious in their prescribing of high-risk medications to patients with low back pain and potentially prevent falls and other adverse events that may negatively impact patient outcomes. It also could align clinical practice with efforts to avoid inappropriate describing in older adults, such as the Beers criteria, and deprescribe where appropriate.\174\ We believe the measure may promote positive changes in care delivery, such as incorporating regular medication review and reconciliation. This measure could be particularly impactful in ASM given the promotion of specialty and primary care integration as a goal of the model. We seek comments on our inclusion of the Use of High-Risk Medications in Older Adults (MIPS Q238) measure in the ASM low back pain measure set. --------------------------------------------------------------------------- \166\ Medicare Payment Advisory Commission. Polypharmacy and opioid use among Medicare Part D enrollees. In: Report to the Congress: Medicare and the Health Care Delivery System. June 2015. Chapter 5. Accessed [insert access date]. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/chapter-5-polypharmacy-and-opioid-use-among-medicare-part-d-enrollees-june-2015-report-.pdf. \167\ Fick DM, Mion LC, Beers MH, L. Waller J. Health outcomes associated with potentially inappropriate medication use in older adults. Research in Nursing & Health. 2008;31(1):42-51. doi:https://doi.org/10.1002/nur.20232. \168\ Fu AZ, Jiang JZ, Reeves JH, Fincham JE, Liu GG, Perri M. Potentially Inappropriate Medication Use and Healthcare Expenditures in the US Community-Dwelling Elderly. Medical Care. 2007;45(5):472- 476. doi:https://doi.org/10.1097/01.mlr.0000254571.05722.34. \169\ North American Spine Society. Clinical Guidelines for Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back Pain. North American Spine Society; 2020. https://www.spine.org/Portals/0/assets/downloads/ResearchClinicalCar. \170\ Santandreu J, Francisco F[eacute]lix Caballero, M Pilar G[oacute]mez-Serranillos, Gonz[aacute]lez-Burgos E. Association between tricyclic antidepressants and health outcomes among older people: A systematic review and meta-analysis. Maturitas. 2024;188:108083-108083. doi:https://doi.org/10.1016/j.maturitas.2024.108083. \171\ Castillo S. Inappropriate Use of Skeletal Muscle Relaxants in Geriatric Patients. Uspharmacist.com. Published January 21, 2020. Accessed April 17, 2025. https://www.uspharmacist.com/article/ inappropriate-use-of-skeletal-muscle-relaxants-in-geriatric- patients#:~:text=Skeletal%20muscle%20relaxants%20are%20on,opioids%20i n%20the%20geriatric%20population. \172\ Castillo S. Inappropriate Use of Skeletal Muscle Relaxants in Geriatric Patients. Uspharmacist.com. Published January 21, 2020. Accessed April 23, 2025. https://www.uspharmacist.com/article/inappropriate-use-of-skeletal-muscle-relaxants-in-geriatric-patients?utm_source=TrendMD&utm_medium=cpc&utm_campaign=US_Pharmacist_TrendMD_0. \173\ Santandreu J, Francisco F[eacute]lix Caballero, M Pilar G[oacute]mez-Serranillos, Gonz[aacute]lez-Burgos E. Association between tricyclic antidepressants and health outcomes among older people: A systematic review and meta-analysis. Maturitas. 2024;188:108083-108083. doi:https://doi.org/10.1016/j.maturitas.2024.108083. \174\ American Geriatrics Society. American Geriatrics Society 2023 updated AGS Beers Criteria for potentially inappropriate medication use in older adults. Journal of the American Geriatrics Society. 2023;71(7). doi:https://doi.org/10.1111/jgs.18372. --------------------------------------------------------------------------- (iii) Preventive Care and Screening: Screening for Depression and Follow-Up Plan (MIPS Q134) We propose to including Preventive Care and Screening: Screening for Depression and Follow-Up Plan (Q134) in the low back pain measure set [[Page 32581]] because patients with chronic pain conditions, such as low back pain, are at an increased risk of developing depression.\175\ Comorbid depression can negatively impact quality of life, treatment adherence, and overall health outcomes.\176\ Screening for depression and providing appropriate follow-up care is an essential aspect of comprehensive care for patients with low back pain, as depression may exacerbate pain and worsen functional status.\177\ Co-occurring depression has also been found to worsen low back pain outcomes and increase health care costs.\178\ Effective management of low back pain often requires a multidisciplinary approach to address the physical, psychological, and emotional aspects of the condition. Including this measure in the ASM low back pain measure set would encourage ASM participants treating low back pain to prioritize mental health screening and follow-up care. We believe this would lead to better management of physical and mental health, prevent worsening of a patient's health status, and improve overall outcomes.179 180 We seek comment on the proposal to include the Preventive Care and Screening: Screening for Depression and Follow- Up Plan (MIPS Q134) measure in the ASM low back pain measure set. --------------------------------------------------------------------------- \175\ Mullins PM, Yong RJ, Bhattacharyya N. Associations between chronic pain, anxiety, and depression among adults in the United States. Pain Practice. 2023;23(6). doi:https://doi.org/10.1111/papr.13220. \176\ Mullins PM, Yong RJ, Bhattacharyya N. Associations between chronic pain, anxiety, and depression among adults in the United States. Pain Practice. 2023;23(6). doi:https://doi.org/10.1111/papr.13220. \177\ North American Spine Society. Clinical Guidelines for Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back Pain. North American Spine Society; 2020. \178\ Wong JJ, Tricco AC, C[ocirc]t[eacute] P, et al. Association Between Depressive Symptoms or Depression and Health Outcomes for Low Back Pain: a Systematic Review and Meta-analysis. Journal of General Internal Medicine. 2021;37(5). doi:https://doi.org/10.1007/s11606-021-07079-8. \179\ Pinheiro MB, Ferreira ML, Refshauge K, et al. Symptoms of Depression and Risk of New Episodes of Low Back Pain: A Systematic Review and Meta-Analysis. Arthritis Care & Research. 2015;67(11):1591-1603. doi:https://doi.org/10.1002/acr.22619. \180\ Tagliaferri SD, Miller CT, Owen PJ, et al. Domains of chronic low back pain and assessing treatment effectiveness: A clinical perspective. Pain Practice. 2019;20(2). doi:https://doi.org/10.1111/papr.12846. --------------------------------------------------------------------------- (iv) Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up Plan (MIPS Q128) We propose to including the Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up Plan (MIPS Q128) measure in the low back pain measure set because obesity can predispose patients to and exacerbate chronic low back pain.181 182 Incorporating BMI screening and related follow-up into the care of patients with low back pain can improve outcomes by reducing the severity and recurrence of low back pain. The inclusion of this measure in the ASM low back pain measure set would incentivize a more holistic approach to low back pain management, addressing both the physical and lifestyle factors contributing to the condition. We believe ASM participants treating low back pain can play a crucial role in preventing and addressing modifiable risk factors like obesity and providing appropriate follow-up plans for weight management. In addition, this measure aligns with those used in other quality programs, such as the Rehabilitative Support for Musculoskeletal Care MVP in the Quality Payment Program. We seek comments on the proposal to include Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up Plan (MIPS Q128) in the ASM low back pain measure set. --------------------------------------------------------------------------- \181\ Zhang TT, Liu Z, Liu YL, Zhao JJ, Liu DW, Tian QB. Obesity as a Risk Factor for Low Back Pain: A Meta-Analysis. Clinical Spine Surgery. 2018;31(1):22-27. doi:https://doi.org/10.1097/BSD.0000000000000468. \182\ North American Spine Society. Clinical Guidelines for Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back Pain. North American Spine Society; 2020. --------------------------------------------------------------------------- (v) Functional Status Change for Patients With Low Back Impairments (MIPS Q220) We propose to include the Functional Status Change for Patients with Low Back Impairments (MIPS Q220) measure in the ASM low back pain measure set. This measure would encourage ASM participants to adopt a more patient-centered and holistic approach to improving functional status and quality of life in patients with low back pain. As a patient-reported outcome measure, the measure tracks changes in a patient's functional status over time, assessing changes and rewarding meaningful improvement with a better measure score for the ASM participant. We believe measuring and improving functional status could increase self-efficacy, improve financial well-being, and lower future medical costs. Measuring a change in functional status can also be used to direct and assess the success of treatment. Furthermore, the adoption of validated objective measurements may enhance the reliability and sensitivity of detecting physical deficits or monitoring posttreatment improvements of low back pain in older adults.\183\ Notably, relevant professional organizations and specialty societies recommend the use of functional status surveys to assess and monitor changes in low back pain over time. The American Academy of Orthopaedic Surgeons recommends the use of the Oswestry Disability Index, which can be used to fulfill this measure, as one of its preferred tools for spine care. While AAOS also recommends the Neck Disability Index, it is less relevant to ASM.184 185 These functional status surveys include questions related to modifiable lifestyle factors, such as physical activity and social isolation, prompting conversation with patients that can prevent the worsening of comorbid conditions and low back pain. In addition, this measure aligns with other quality programs, such as the Rehabilitative Support for Musculoskeletal Care MVP in the Quality Payment Program and the Core Quality Measures Collaborative Orthopedics set. By holding ASM participants who treat low back pain accountable for this measure, ASM promotes a comprehensive approach to low back pain management, including appropriate assessment, treatment, and monitoring of changes. We seek comment on our proposal to include the Functional Status Change for Patients with Low Back Impairments (MIPS Q220) measure in the low back pain measure set. --------------------------------------------------------------------------- \183\ Wong AY, Karppinen J, Samartzis D. Low back pain in older adults: risk factors, management options and future directions. Scoliosis and Spinal Disorders. 2017;12(1):1-23. doi:https://doi.org/10.1186/s13013-017-0121-3. \184\ North American Spine Society. Clinical Guidelines for Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back Pain. North American Spine Society; 2020. \185\ Performance Measures by Orthopaedic Subspecialty. Aaos.org. Published 2025. Accessed April 23, 2025. https://www.aaos.org/quality/research-resources/patient-reported-outcome-measures/performance-measures-by-orthopaedic-subspecialty. --------------------------------------------------------------------------- (d) Other Measures Under Consideration (i) Patient Activation Measure (PAM) (MIPS Q503) We seek comments on whether the Patient Activation Measure (PAM) (MIPS Q503) would be appropriate to include in both the heart failure and low back pain measure sets. Chronic conditions, in general, are influenced by external factors, such as lifestyle, education, nutrition, and activity. Patient activation, which refers to a patient's knowledge, skills, and confidence in managing their health condition, is an important factor in achieving better health outcomes and [[Page 32582]] adherence to treatment plans. For chronic conditions , such as heart failure and low back pain, where self-management and active patient engagement are crucial, assessing and improving patient activation levels could help ASM participants tailor their ability to provide more patient-centered support and education. Including the PAM measure in ASM could incentivize clinicians to prioritize strategies that enhance patient activation, such as shared decision-making, goal setting, and self-management support.\186\ Furthermore, higher levels of patient activation have been associated with better health behaviors, such as physical activity, and improved mental health outcomes.\187\ We are concerned by the burden on participants and patients that may be introduced by: (1) adding an additional measure to the set, (2) using a patient survey measure, and (3) PAM being a proprietary measure. We seek comments on whether PAM could be applicable to the heart failure and low back pain measure sets. --------------------------------------------------------------------------- \186\ Newland P, Lorenz R, Oliver BJ. Patient activation in adults with chronic conditions: A systematic review. Journal of Health Psychology. Published online August 23, 2020:135910532094779. doi:https://doi.org/10.1177/1359105320947790. \187\ Hosseinzadeh H, Downie S, Shnaigat M. Effectiveness of health literacy- and patient activation-targeted interventions on chronic disease self-management outcomes in outpatient settings: a systematic review. Australian Journal of Primary Health. 2022;28(2). doi:https://doi.org/10.1071/py21176. --------------------------------------------------------------------------- (ii) Advance Care Plan (MIPS Q047) We considered including the Advance Care Plan (MIPS Q047) measure in the heart failure measure set. Advance care planning is important for understanding and documenting a patient's wishes regarding their medical treatment, acknowledging that wishes may evolve as circumstances and health status change. Heart failure, depending on stage and other risk factors, can progress unpredictably and rapidly. According to one meta-analysis, survival rates for all patients with heart failure are 95.7 percent at one month, 86.5 percent at 1 year, and 56.7 percent at 5 years, with elderly patients having lower survival rates on average.\188\ Having a documented plan in place is necessary to ensure a patient's wishes are followed should they become incapacitated and unable to make care decisions. One study of Medicare beneficiaries with severe illness found that timely advance care planning was associated with significantly less intensive end-of-life care utilization and fewer in-hospital deaths, hospital admissions, intensive care unit admissions, and emergency department visits.\189\ Another study on Medicare beneficiaries with heart failure found that beneficiaries who received advance care planning visits had 19 percent lower total end-of-life expenditure compared to those who did not.\190\ This measure could encourage ASM participants to have proactive discussions with their patients about end-of-life care, advance directives, and other important decisions related to their treatment plan. However, we decided not to include the measure, as we worry the measure would not result in sufficiently meaningful positive changes for patients to justify the increased burden. Also, we do not believe the cardiologist would be the most appropriate provider to oversee advance care planning in every case, and we want to avoid duplication of effort with PCPs. We seek comments on whether the Advance Care Plan measure could be meaningful if included in the heart failure measure set. --------------------------------------------------------------------------- \188\ Jones NR, Roalfe AK, Adoki I, Hobbs FDR, Taylor CJ. Survival of patients with chronic heart failure in the community: A systematic review and meta[hyphen]analysis. European Journal of Heart Failure. 2019;21(11):1306-1325. doi:https://doi.org/10.1002/ejhf.1594. \189\ Weissman JS, Reich AJ, Prigerson HG, et al. Association of Advance Care Planning Visits With Intensity of Health Care for Medicare Beneficiaries With Serious Illness at the End of Life. JAMA Health Forum. 2021;2(7):e211829. doi:https://doi.org/10.1001/jamahealthforum.2021.1829. \190\ Brill SB, Riley SR, Prater L, et al. Advance Care Planning (ACP) in Medicare Beneficiaries with Heart Failure. Journal of General Internal Medicine. 2024;39(13):2487-2495. doi:https://doi.org/10.1007/s11606-024-08604-1. --------------------------------------------------------------------------- (iii) Clinician and Clinician Group Risk-Standardized Hospital Admission Rates for Patients With Multiple Chronic Conditions (MIPS Q484) We considered including the Clinician and Clinician Group Risk- standardized Hospital Admission Rates for Patients with Multiple Chronic Conditions (MIPS Q484) measure in the heart failure measure set. We believe evaluating potentially preventable hospital admissions could help assess the quality of ambulatory care provided by cardiologists to patients with multiple chronic conditions, including heart failure. Nearly 90 percent of adults with heart failure have two or more additional chronic conditions, and almost 60 percent have five or more chronic conditions.\191\ For heart failure patients with multiple comorbidities, reducing potentially preventable hospitalizations is a key goal for improving outcomes and reducing health care costs. While incentivizing cardiologists to adopt best practices, such as improving care coordination with primary care and enhancing self-management support, is of interest to CMS, this measure is not adequately targeted to heart failure. We also do not consider this measure appropriate for the low back pain measure set, as the condition is less prone to hospital admissions and re-admissions. We seek comments on whether the Clinician and Clinician Group Risk- standardized Hospital Admission Rates for Patients with Multiple Chronic Conditions (MIPS Q484) measure should be considered for inclusion in the heart failure measure set. --------------------------------------------------------------------------- \191\ Dharmarajan K, Dunlay SM. Multimorbidity in Older Adults with Heart Failure. Clinics in Geriatric Medicine. 2016;32(2):277- 289. doi:https://doi.org/10.1016/j.cger.2016.01.002. --------------------------------------------------------------------------- (iv) Cardiac Rehabilitation Patient Referral From an Outpatient Setting (MIPS Q243) We considered including the Cardiac Rehabilitation Patient Referral from an Outpatient Setting measure in the heart failure measure set. This measure assesses the percentage of patients evaluated in an outpatient setting who have qualified for cardiac rehabilitation and were referred to an outpatient cardiac rehabilitation program. As it relates to heart failure, Medicare patients only qualify for a cardiac rehabilitation program if they have stable chronic heart failure, defined as left ventricular ejection fraction of 35 percent or less and New York Heart Association (NYHA) class II to IV symptoms despite being on optimal heart failure therapy for at least 6 weeks.\192\ In these patients, cardiac rehabilitation is a comprehensive intervention that includes exercise training, education, and counseling to improve cardiovascular health and reduce the risk of future cardiac events. For patients with heart failure, meta-analyses on cardiac rehabilitation have shown that it improves functional capacity, exercise duration, and health-related quality of life.\193\ Also, cardiac rehabilitation programs have evolved to serve other purposes, such as disease management and prevention centers that assist with medication adherence, weight loss, smoking cessation, and other contributors to heart disease.\194\ [[Page 32583]] By including this measure in the heart failure measure set, CMS could incentivize cardiologists and other clinicians to refer eligible patients with heart failure to cardiac rehabilitation programs, which can potentially improve their long-term outcomes and reduce their risk of hospitalizations. We decided not to include the measure in the heart failure measure set because access to cardiac rehabilitation programs is significantly varied based on region due to factors like limited availability, density, eligibility, or distance, and these factors could negatively affect ASM participants due to no fault of their own.\195\ We seek comment on whether the Cardiac Rehabilitation Patient Referral from an Outpatient Setting measure could be meaningful if included in the heart failure measure set. --------------------------------------------------------------------------- \192\ Cardiac Rehabilitation Program Coverage. www.medicare.gov. https://www.medicare.gov/coverage/cardiac-rehabilitation. \193\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/ HFSA Guideline for the Management of Heart failure: a Report of the American College of Cardiology/American Heart Association Joint Committee on Clinical Practice Guidelines. Circulation. 2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063. \194\ Ades PA, Keteyian SJ, Wright JS, et al. Increasing Cardiac Rehabilitation Participation From 20% to 70%: A Road Map From the Million Hearts Cardiac Rehabilitation Collaborative. Mayo Clinic Proceedings. 2017;92(2):234-242. doi:https://doi.org/10.1016/j.mayocp.2016.10.014. \195\ Duncan MS, Robbins NN, Wernke SA, et al. Geographic Variation in Access to Cardiac Rehabilitation. Journal of the American College of Cardiology. 2023;81(11):1049-1060. doi:https://doi.org/10.1016/j.jacc.2023.01.016. --------------------------------------------------------------------------- (v) Falls: Plan of Care We considered including the Falls: Plan of Care measure in the low back pain measure set. This measure assesses the percentage of patients aged 65 years and older with a history of falls that had a plan of care for falls documented within 12 months. The implementation of a falls plan of care for this population could address multiple aspects of patient safety and functional improvement. Such a plan may include assessment of environmental hazards, evaluation of medication side effects, and implementation of appropriate exercise interventions to improve strength, balance, and coordination.\196\ For low back pain patients specifically, the plan could incorporate targeted exercises that not only address fall prevention but also support their primary condition management, creating a comprehensive approach to their care. The Falls: Plan of Care quality measure is particularly relevant for the low back pain patient population as these patients may experience altered biomechanics, decreased mobility, and impaired balance, which may significantly increase their risk of falls. Patients with low back pain may also exhibit protective movement patterns and altered postures that, while intended to minimize pain, may compromise their stability and balance. Studies have shown that some elderly patients with a recent history of back pain are at increased risk for falls, with that risk increasing as the number of locations they experience pain in their back increases.197 198 Another study found that community-dwelling older adults with chronic pain generally, such as low back pain, were more likely to have fallen in the past 12 months and to fall again in the future.\199\ Additionally, low back pain patients may take medications such as muscle relaxants, anti- depressants, or other medications that can affect their balance and coordination, further elevating their fall risk.200 201 By including this measure in the low back pain measure set, we could promote ASM participants to assess the risk a patient is at for falls and implement any needed plan or corrective actions to mitigate the issues that may be present. We decided not to include the measure in the low back pain measure set as we are concerned that beneficiaries in ASM may have falls may for reasons, such as syncope, that are less relevant to the care of the ASM participant, and that the incidence of falls is not high enough in this patient population. We seek comments on whether the Falls: Plan of Care measure could be meaningful if included in the low back pain measure set. --------------------------------------------------------------------------- \196\ CDC. Outpatient Care--STEADI in Primary Care. STEADI-- Older Adult Fall Prevention. Published May 16, 2024. https://www.cdc.gov/steadi/hcp/clinical-resources/outpatient-care.html. \197\ Marshall LM, Litwack-Harrison S, Makris UE, et al. A Prospective Study of Back Pain and Risk of Falls Among Older Community-dwelling Men. The Journals of Gerontology Series A: Biological Sciences and Medical Sciences. Published online November 16, 2016:glw227. doi:https://doi.org/10.1093/gerona/glw227. \198\ Marshall LM, Litwack-Harrison S, Cawthon PM, et al. A Prospective Study of Back Pain and Risk of Falls Among Older Community-dwelling Women. The Journals of Gerontology Series A: Biological Sciences and Medical Sciences. 2016;71(9):1177-1183. doi:https://doi.org/10.1093/gerona/glv225. \199\ Stubbs B, Binnekade T, Eggermont L, Sepehry AA, Patchay S, Schofield P. Pain and the Risk for Falls in Community-Dwelling Older Adults: Systematic Review and Meta-Analysis. Archives of Physical Medicine and Rehabilitation. 2014;95(1):175-187.e9. doi:https://doi.org/10.1016/j.apmr.2013.08.241. \200\ Park H, Satoh H, Miki A, Urushihara H, Sawada Y. Medications associated with falls in older people: systematic review of publications from a recent 5-year period. European Journal of Clinical Pharmacology. 2015;71(12):1429-1440. doi:https://doi.org/10.1007/s00228-015-1955-3. \201\ Castillo S. Inappropriate Use of Skeletal Muscle Relaxants in Geriatric Patients. Uspharmacist.com. Published January 21, 2020. Accessed April 17, 2025. https://www.uspharmacist.com/article/inappropriate-use-of-skeletal-muscle-relaxants-in-geriatric-patients?utm_source=TrendMD&utm_medium=cpc&utm_campaign=US_Pharmacist_TrendMD_0. --------------------------------------------------------------------------- (e) Removal and Addition of Quality Measures While we do not plan to add or remove measures from either cohort's measure set of the ASM test period, there may be circumstances in which it is necessary. We propose at Sec. 512.725(d) that we would add or remove any quality measure for an ASM cohort through notice and comment rulemaking. We may propose to add or remove measures in response to relevant public comments, recommendations from participants and their collaborators, new CMS program activities, or significant changes to the included measures. Because the quality measures currently proposed are all part of MIPS, any updates CMS applies to the measures within MIPS would be incorporated into the quality measure sets accordingly. We seek comments on the proposed approach for removal or addition of quality measures. (f) Maintenance of Technical Specifications for Quality Measures We propose at Sec. 512.725(d) to release technical specifications for the required quality measures in a form and manner determined by CMS for each ASM performance year via notice and comment rulemaking. We intend to use the most recent MIPS version of the technical specifications for all applicable measures. For non-MIPS measures, we would release the measure specifications in advance of the ASM performance year in which the specifications would be applicable via notice-and-comment rulemaking. If any changes are made to specifications for MIPS measures, and ASM chooses not to adopt these changes, we propose releasing the measure technical specifications applicable to ASM via notice and comment rulemaking before the start of each ASM performance year. We seek comments on our proposal to use the most recent MIPS version of technical specifications of quality measures for each ASM performance year. We also seek comment on our intent to release the technical specifications of non-MIPS measures via notice and comment rulemaking, and if it allows adequate time for ASM participants to make any needed adjustments to data collections systems or practice workflows. (g) Data Submission Criteria for the Quality ASM Performance Category We propose at Sec. 512.725(e)(1) that ASM participants submitting data for measures with non-administrative claims-based measures would be required to submit data for each measure using one of the measure's collection types identified for each required quality measure as detailed in Table 39. We propose at Sec. 512.725(e)(2) [[Page 32584]] that for the applicable ASM performance year, each ASM heart failure participant would report all of the measures in the heart failure measure set as described in section III.C.2.d.(2).(b) of this proposed rule and each ASM low back pain participant would report all the measures in the low back pain measure set as described in section III.C.2.d.(2).(c) of this proposed rule. We seek comments on the proposed form, manner, and timing of quality measures reporting at Sec. 512.725(e). (h) Data Completeness Requirement and Case Minimums for the Quality ASM Performance Category (i) Data Completeness Requirement We propose at Sec. 512.725(f)(1) to set a data completeness requirement of at least 75 percent beginning in the 2027 ASM performance year. Data completeness is essential to ensure that data submitted on quality measures are sufficiently complete to accurately assess each ASM participant's quality performance. The data completeness requirement means that an ASM participant submitting measure data on MIPS clinical quality measures (MIPS CQMs) or eCQMs must submit data on at least a specific percent of their patients that meet the measure's denominator criteria, regardless of payer. Also, the inclusion of eCQMs in ASM measure sets more easily enables submission of data on 100 percent of the patient records in a provider's EHR, making data completeness more achievable. We believe it is important to maintain high data completeness to ensure the most accurate assessment of ASM participants. The CY 2025 PFS final rule set the CY 2025 MIPS performance period/2027 MIPS payment year MIPS data completeness requirement for the quality performance category at 75 percent (89 FR 98383 through 98387). Prior to this, the MIPS data completeness requirement had been periodically increasing from where it started, which was at least 50 percent to where it currently is (89 FR 98383 through 98387). We do not intend to continue to align with MIPS data completeness requirements and instead propose to assess changes to the ASM quality measure data completeness as needed for model-specific purposes. Since some ASM participants would not have previously reported to MIPS and, therefore, may have limited experience and capabilities with quality reporting of this type, we considered data completeness requirement lower than 75 percent for 2027 ASM performance year and then increasing to 75 percent beginning in the 2028 ASM performance year 2028. We also propose at Sec. 512.725(f)(2) that ASM participants would receive zero ``measure achievement points,'' which we propose at Sec. 512.705 to mean numerical values assigned to an ASM participant's reported performance data that we use to calculate an ASM performance category score, for any required measure that does not meet the proposed data completeness requirement. Meeting the data completeness requirement ensures that the measure represents an appropriate percentage of the clinical population applicable for a given quality measure. Therefore, we believe that not meeting the proposed data completeness requirement for a given required quality measure should result in the ASM participant receiving zero achievement points for that measure. Finally, we propose at Sec. 512.725(f)(3) that we exclude from an ASM's participant total measure achievement points and total available measure achievement points any required measures meet the respective measure's data completeness requirement, but do not have a benchmark. As discussed later in this section of this proposed rule, we believe that it would not be appropriate to score quality measures for which we cannot determine a benchmark. We seek comments on the proposed data completeness requirement of 75 percent at Sec. 512.725(f)(1) and whether a different data completeness percentage that we considered would be more appropriate. We also seek comment on our proposal at Sec. 512.725(f)(2) that ASM participants would receive zero measure achievement points for any submitted quality measure that does not meet the data completeness requirement. Finally, we seek comment on our proposal at Sec. 512.725(f)(3) for not scoring measures that meet data completeness requirements but for which we cannot determine a benchmark. (ii) Minimum Case Requirements We seek to ensure that ASM participants are measured reliably, therefore, we propose at Sec. 512.725(g)(1) to use 20 cases as the minimum case requirement for each quality measure. We propose at Sec. 512.725(g)(2) that ASM participants that report measures with fewer cases than the case minimum for the measure and meet the data completeness requirement proposed at Sec. 512.725(f)(1) would receive recognition for submitting the measure, but we would not include the measure in the quality ASM performance category scoring as described later in this section of this proposed rule. We believe this case minimum is appropriate as it aligns with the case minimum under MIPS as defined at Sec. 414.1380(b)(1)(iii). We seek comments on our proposed case minimum for quality measures at Sec. 512.725(g). (i) Quality Measure Achievement Points and Quality ASM Performance Category Scoring (i) Quality Measure Achievement Points We propose at 512.725(h)(1)(i) to assign 1 to 10 measure achievement points to each measure based on how an ASM participant performance compares to measure-specific benchmarks determined as described in section III.C.2.d.(2).(i) of this proposed rule. We propose at Sec. 512.725(h)(1)(iii) that if an ASM participant fails to submit a measure required under the quality ASM performance category, then the ASM participant would receive zero measure achievement points for that measure. We propose at Sec. 512.725(h)(1)(ii) and (iii) that measures reported by ASM participants must have the required case minimum as applicable for each measure, as proposed at Sec. 512.725(g)(1), and meet the data completeness requirement, as proposed at Sec. 512.725(f)(1), to receive a score. For example, if an ASM participant reports a measure that meets the data completeness requirement rule but does meet the required case minimum, then the ASM participant would not be scored on that measure, and that measure score would not be factored into the ASM participant's quality ASM performance category score. An ASM participant who reports a measure that does not meet the data completeness requirement but meets the required case minimum of this proposed rule would receive a score of zero for the measure. An ASM participant who does not report the measure would receive a score of zero for the measure. We propose at Sec. 512.725(h)(1)(iv) that an ASM participant that submits data for the same measure under two different collection types, if applicable, would be scored on the data submission that leads to the greatest number of achievement points for that required measure. The quality ASM performance category score would be the sum of all the measure achievement points assigned for the scored measures required for the quality ASM performance category divided by the sum of total possible measure achievement points. We also propose not to score measures for which we could not [[Page 32585]] determine a benchmark for a given ASM performance year as described in section.III.C.2.d.(2)(i)(ii) of this proposed rule. In this situation, the quality ASM performance category score would not include any measure or measures for which a benchmark could not be determined. We believe that it would be unfair to penalize ASM participants due to a lack of a benchmark. We seek comments on this proposed quality ASM performance category scoring approach as described at Sec. 512.725(h)(1). (ii) Benchmarking For the quality ASM performance category, we propose at Sec. 512.725(h)(2) that the ASM performance standard is a measure-specific benchmark. We propose at Sec. Sec. 512.725(h)(2)(i)(A) through (C) to determine benchmarks for each quality measure and for each of the measure's collection types using data reported by ASM participants, to the extent feasible, during the ASM performance year, from a previous ASM performance year, or from another period determined by CMS. The benchmark determination is contingent on relevant available data for accurate calculation that is specific to ASM participants. For measures with an administrative claims-based collection type, we propose at Sec. 512.725(h)(2)(iii) to calculate the benchmark using performance on the measure during the current ASM performance year. We believe it is important to determine separate benchmarks for each of a measure's collection types since performance varies by collection type in MIPS.\202\ We considered determining one benchmark per quality measure regardless of collection type since having a single benchmark may help ASM participants more readily calibrate their performance. Given the differences in MIPS performance by collection type for measures that we propose to require in ASM,\203\ we believe it would be more appropriate to calculate a benchmark for each collection type. --------------------------------------------------------------------------- \202\ https://qpp.cms.gov/resources/performance-data. \203\ https://qpp.cms.gov/resources/performance-data. --------------------------------------------------------------------------- We propose at Sec. 512.725(h)(2)(iv) to determine benchmarks for each measure's collection type using deciles based on the applicable period of data we use to determine the measure's benchmark. Then, we would evaluate an ASM participant's actual measure performance during the ASM performance year to determine the number of measure achievement points that should be assigned based on where the actual measure performance falls within the benchmark. We propose establishing benchmarks using a percentile distribution, separated by decile categories, because it translates measure-specific score distributions into a uniform distribution of ASM participants based on actual performance values. For each set of benchmarks, we propose to calculate the decile breaks for measure performance and assign measure achievement points for a measure based on which benchmark decile range the ASM participant's performance rate on the measure falls between. For example, an ASM participant in the top decile would receive 10 measure achievement points for the measure, and an ASM participant in the next lower decile would receive measure achievement points ranging from 9 to 9.9. We propose to assign partial measure achievement points to prevent performance cliffs for ASM participants near the decile breaks. The partial measure achievement points would be assigned based on the percentile distribution We propose at Sec. Sec. 512.725(h)(2)(ii)(A) through (C) that we only calculate benchmarks for measures that have a minimum of 20 ASM participants that report the measure: (1) meeting the data completeness requirement as proposed at Sec. Sec. 512.725(f)(1) through (2) meeting the required case as proposed at Sec. Sec. 512.725(g)(1) and (3) a performance rate greater than zero. We propose a minimum of 20 because our benchmarking methodology relies on assigning measure achievement points based on decile distributions with decimals. A decile distribution requires at least 10 observations. We would double the requirement to 20 so that we would be able to assign decimal measure achievement point values and minimize cliffs between deciles. Given the mandatory participation of ASM and the mandatory quality measure sets, we do not anticipate that we would encounter challenges with meeting this proposed minimum of 20 ASM participants reporting a measure to determine a benchmark. We seek comments on our proposed benchmark determination process as proposed at Sec. 512.725(h)(2) and all alternatives considered. (iii) Topped-Out Quality Measures We propose at Sec. 512.725(h)(3) that we would identify topped out measures in the benchmarks for each ASM performance year, based on within-model performance on each measure. We considered but are not proposing an initial policy regarding topped out measures and differential benchmarking for measures with a topped-out status. MIPS defines at Sec. 414.1305 a topped out non-process measure as a measure where the Truncated Coefficient of Variation is less than 0.10 and the 75th and 90th percentiles are within 2 standard errors; MIPS also defines at Sec. 414.1305 a topped-out process measure as measure with a median performance rate of 95 percent or higher. We propose monitoring during initial ASM performance year(s) before designating an ASM measure with topped out status. We would propose using a definition like the definition used by MIPS and the Hospital Value-Based Purchasing (HVBP) Program: a Truncated Coefficient of Variation less than 0.10 and the 75th and 90th percentiles are within 2 standard errors as defined at Sec. 412.164(c)(3) (88 FR 59333);[thinsp]or median value for a process measure that is 95 percent or greater (80 FR 49550). Topped out measures are of concern as it makes it difficult to assess relative performance to most accurately score the quality ASM performance category. However, since all ASM participants reporting one of the two measure sets would only be compared among others also reporting that measure set, and all the measures are mandatory to report, the benefit of selecting a topped-out measure is nullified. In this way, the reasoning for removing topped out measures is also nullified. Several of the measures included in our measure sets are topped out in other programs, such as MIPS, potentially because MIPS participants can select the measures on which they believe they would perform well. It is unclear whether requiring ASM participants to report a measure that is topped out in MIPS would present the same issues typically associated with topped-out measures or if the appearance of being topped out is simply due to voluntary reporting by only the highest performers in MIPS. We seek comment on our proposal at Sec. 512.725(3) to identify topped out measures in the benchmarks for each ASM performance year, based on within-model performance on each measure, as well as all alternatives considered. (iv) Calculation of the Quality ASM Performance Score We propose at Sec. 512.725(h)(4) to sum all quality measure achievement points determined for all measure reported by an ASM participant for an applicable ASM performance year. We would then divide that total achievement points by the total available measure achievement [[Page 32586]] points for measures reported by the ASM participant that meets the case minimum requirements as defined at Sec. 512.725(g) to determine an overall quality ASM performance category score, which could not exceed 100 percentage points. We propose at Sec. 512.725(h)(4)(ii) that if data used to calculate a score for a quality measure are impacted by significant changes or errors affecting the ASM performance year, such that calculating the quality measure score would lead to misleading or inaccurate results, then the affected quality measure would be based on data for 9 consecutive months of the applicable ASM performance year. We propose at Sec. 512.725(h)(4)(ii)(A) to consider ``significant changes or errors'' regarding instances in which a quality measure score could not be calculated as changes or errors external to the care provided, and that CMS determines may lead to misleading or inaccurate results that negatively impact the measure's ability to reliably assess performance. We further propose at Sec. 512.735(h)(4)(ii)(A) that significant changes or errors include, but are not limited to, rapid or unprecedented changes to service utilization, the inadvertent omission of codes or inclusion of codes, or changes to clinical guidelines or measure specifications. We also propose at Sec. 512.725(h)(4)(ii)(B) that we would publish a list of all measures scored in a form and manner specified by CMS. Finally, we propose at Sec. 512.725(h)(4)(ii)(C) that if CMS determines sufficient measure data is not available, or that there is the possibility of patient harm or misleading results, a measure would be excluded from a participants score. We believe these proposed policies would appropriately adapt the proposed quality ASM performance category scoring policies so that ASM participants would not be penalized for changes or errors in the measure and associated submitted data that would be outside the control of the ASM participant. We propose at Sec. 512.735(h)(4)(iii) that an ASM participant would not receive a quality ASM performance category score if the ASM participant meets the quality ASM performance category data submission requirements proposed at Sec. 512.720(a)(1)(i) but does not meet the case minimum requirements for any of the required quality measures in their applicable quality measure set. As discussed in sections III.C.2.e.(2)(b) and III.C.2.f.(4) of this proposed rule, the ASM participant in this situation would not receive a payment adjustment for the applicable ASM payment year. We believe that we should hold all ASM participants accountable to performance on quality. Accordingly, it would be inappropriate to evaluate the performance of an ASM participant that reports complete quality measure data but cannot meet the case minimums for any required measure within the applicable quality measure set since they would not have sufficient case volume by which to evaluate clinical quality. We seek comments on our proposed approach to calculate measure achievement points for each required quality measure and determine benchmarks for quality measures in the quality ASM performance category. We also seek comment on our proposed approach to monitor for topped out measure status and future considerations for how we should approach and manage identified topped out measures in ASM. Finally, we seek comment on our proposal to calculate the quality ASM performance category score, as well as the proposed exceptions that could prevent the calculation of an individual quality measure score. or an overall performance category score. (3) Proposed Cost ASM Performance Category The proposed cost ASM performance category supports the model goals to improve quality care as measured through a focused measure set relevant to ASM's clinical specialties and targeted chronic conditions, while decreasing the cost of care for beneficiaries with ASM's targeted chronic conditions. The cost ASM performance category ensures that Medicare beneficiaries are receiving clinically appropriate, comprehensive, high-value care. The importance of the cost ASM performance category is reflected in the weight of the performance category contribution to the final score, discussed at section III.C.2.e.(1) of this proposed rule. (a) Background The cost ASM performance category is one of four ASM performance categories measuring an ASM participant's performance on the care delivered related to ASM's targeted chronic conditions. The cost ASM performance category incentivizes ASM participants to ensure Medicare beneficiaries are receiving clinically appropriate, comprehensive, high-value care. Like the cost performance category under the MVPs, ASM participants in each ASM cohort would be scored on a condition-relevant EBCM. We propose at Sec. 512.730(b) to use two EBCMs specified for the MIPS cost performance category, the Heart Failure EBCM and the Low Back Pain EBCM. As discussed below, while we are proposing to evaluate ASM participants on their performance on these two MIPS cost measures, and are proposing to use the same MIPS cost benchmarking and scoring methodology finalized for the 2024 MIPS performance period defined at Sec. 414.1380(b)(2)(i)(B), we are proposing to use different benchmark ranges. (b) Performance Year for Cost ASM Performance Category Beginning with ASM payment year 2029, we propose at Sec. 512.730(a) that the ASM performance year for cost measures would be the full calendar year from January 1 to December 31 that occurred 2 years prior to an applicable ASM payment year. We believe that setting that setting the ASM performance year for cost measures in this way aligns with MIPS as defined at Sec. 414.1320 and would be easily adoptable by ASM participants. We seek comments on our proposed approach at Sec. 512.730(a) setting the ASM performance year for cost measures. (c) Cost Measure for the ASM Heart Failure Cohort For the ASM heart failure cohort, we propose at Sec. 512.730(b)(1) to utilize the heart failure EBCM, a MIPS cost measure specified by CMS through rulemaking, to determine an ASM heart failure participant's cost ASM performance category score.\204\ We are proposing the heart failure EBCM, in part, because the Advancing Care for Heart Disease MVP (88 FR 80022 through 80025; 89 FR 99015 through 99019) includes it as one of the mandatory cost measures. The heart failure EBCM evaluates a participant's risk adjusted and specialty-adjusted cost to Medicare for beneficiaries receiving medical care to manage and treat heart failure.\205\ We are proposing the heart failure EBCM because the measure quantifies the costs of services that are clinically related to the participant's role in managing care during a heart failure episode. We believe that the heart failure EBCM captures a targeted high-cost patient population, has robust clinician coverage, and can help lower Medicare spending. The heart failure EBCM is a complex, yet feasible, chronic condition measure that [[Page 32587]] addresses care delivered to manage heart failure. We believe holding ASM heart failure participants accountable on the heart failure EBCM represents an opportunity to measure reductions in the cost of care for beneficiaries with heart failure. --------------------------------------------------------------------------- \204\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about. \205\ https://www.cms.gov/files/zip/2024-cost-measure-information-forms-zip.zip-0. --------------------------------------------------------------------------- Additionally, we are proposing this measure and the focus on heart failure, generally, due to the prevalence of heart failure in the Medicare FFS population, and the high costs associated with the management of the disease and its complications. The incidence of heart failure increases with age, rising from 20 per 1,000 individuals aged 65 to 69 to more than 80 per 1,000 individuals over 80 years of age.\206\ With an estimated 1 in 5 Americans 40 years and older expected to develop heart failure and 1 in 5 Americans expected to be 65 years or older by 2050, the number of Americans with heart failure is predicted to significantly increase in the future.\207\ Further, heart failure was listed as the cause of death on 13.4 percent of all death certificates in the United States in 2018.\208\ In addition to its prevalence, heart failure is also costly for the health care system. According to the Centers for Disease Control and Prevention (CDC), heart failure costs the United States $30.7 billion annually, including health care services, medications used to treat heart failure, and lost productivity.\209\ A large contributor to heart failure-related health care costs may be inpatient admissions, with one study estimating that roughly 1 in 6 beneficiaries returned to the hospital for admission for heart failure-related reasons within 90 days of their initial discharge.\210\ --------------------------------------------------------------------------- \206\ Yancy et al. ``2013 ACCF/AHA Heart Failure Guidelines.'' (2013). https://www.ahajournals.org/doi/pdf/10.1161/CIR.0b013e31829e8776. \207\ Yancy et al. ``2013 ACCF/AHA Heart Failure Guidelines.'' (2013). https://www.ahajournals.org/doi/pdf/10.1161/CIR.0b013e31829e8776. \208\ Centers for Disease Control and Prevention (CDC) ``Heart Failure.'' September 2020. https://www.cdc.gov/heartdisease/heart_failure.htm. \209\ Centers for Disease Control and Prevention (CDC) ``Heart Failure.'' September 2020. https://www.cdc.gov/heartdisease/heart_failure.htm. \210\ Kilgore et al., ``Economic burden of hospitalizations of Medicare beneficiaries with heart failure,'' Risk Management and Healthcare Policy 10 (2017): 63-70, doi: 10.2147/RMHP.S130341. --------------------------------------------------------------------------- We seek comments on the proposed use of the heart failure EBCM at Sec. 512.730(b)(1) to score the cost ASM performance category for the ASM heart failure cohort. (d) Cost Measure for ASM Low Back Pain Cohort For the ASM low back pain cohort, we propose at Sec. 512.730(b)(2) to utilize the low back pain EBCM to determine an ASM low back pain participant's cost ASM performance category score.\211\ The low back pain EBCM evaluates a participant's risk adjusted and specialty- adjusted cost to Medicare for patients receiving medical care to manage and treat low back pain. We are proposing the low back pain EBCM, in part, to align with the Rehabilitative Support for Musculoskeletal Care MVP (88 FR 80002 through 80007; 89 FR 99050 through 990054). We also believe this chronic condition EBCM appropriately captures the costs of services that are clinically related to the participant's role in managing the longitudinal care during a low back pain episode. --------------------------------------------------------------------------- \211\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about. --------------------------------------------------------------------------- We believe that use of the low back pain EBCM would help increase accountability on spending and limit low-value care related to low back pain. Low back pain is highly prevalent and a high driver of spending. For example, an estimated 20 percent of people living in the United States experience low back pain,\212\ and a 2020 study found that low back and neck pain contributed the most to health care spending among 154 mutually exclusive diagnoses, at $134.5 billion in 2016.\213\ Other studies have also found large increases in resource use for low backpain despite only modest increase in its prevalence and little improvement in patient outcomes,214 215 216 which underscores the need for more precise measure of resource use and quality of care. Given these findings, we believe the low back pain EBCM would be an appropriate measure by which to accurately determine resource use related to low back pain and compare cost-related performance across ASM low back pain participants. --------------------------------------------------------------------------- \212\ Will, Joshua Scott, David Bury, and John Miller, ``Mechanical Low Back Pain.'' American Academy of Family Physicians 98(7) (2018): 421-428. \213\ Dieleman, Joseph, Jackie Cao, and Abby Chapin, ``US Health Care Spending by Payer and Health Condition, 1996-2016.'' JAMA Network 323(9) (2020): 863-884. doi:10.1001/jama.2020.0734. \214\ Luo, Xuemei, Ricardo Pietrobon, Shawn Sun, Gordon Liu, and Lloyd Hey, ``Estimates and Patterns of Direct Health Care Expenditures Among Individuals With Back Pain in the United States.'' Spine 29(1) (2004): 79-86. doi:10.1097/ 01.BRS.0000105527.13866.0. \215\ Deyo, Richard, Sohail Mirza, Judith Turner, and Brook Martin, ``Overtreating Chronic Back Pain: Time to Back Off?'' J Am Board Fam Med 22(1) (2009): 62-68. doi:10.3122/jabfm.2009.01.080102. \216\ Norman Marcus Pain Institute, ``Pain Facts.'' Last updated 23 January 2012. https://www.normanmarcuspaininstitute.com/tag/neck-and-shoulder-pain/. --------------------------------------------------------------------------- We seek comments on the proposed use of the low back pain EBCM at Sec. 512.730(b)(2) to determine the cost ASM performance category score for the ASM low back pain cohort. (e) Removal and Addition of Cost Measures We intend to avoid making significant changes to the cost measure over the ASM test period. However, we propose at Sec. 512.730(c) to add or remove measures through notice and comment rulemaking as discussed at Sec. 512.730(c) if we believe refinements to the measure set are necessary. We may propose to add or remove measures in response to relevant public comments, recommendations from participants and their collaborators, new CMS program activities, or significant changes to the included measures. Because the cost measures currently proposed are all part of MIPS, any updates CMS applies to the measures within MIPS would be incorporated into the cost ASM measure sets accordingly. We seek comments on our proposed approach at Sec. 512.730(c) for adding or removing cost measures if necessary. (f) Minimum Case Requirements Like under MIPS, as specified in Sec. 414.1350(c)(6) (88 FR 79346 through 79348), we propose at Sec. 512.730(d) that an ASM participant must have at least 20 attributed episodes (that is, cases) at the TIN/ NPI level during an ASM performance year for the ASM participant to receive a score on the applicable EBCM. A participant with an unscored EBCM would also remain unscored in their ASM cost performance category score, resulting in a neutral payment adjustment for the applicable ASM payment year because the participant is required to have an ASM cost performance category score to receive a final score as discussed in section III.C.2.e.(2)(b). As discussed in section III.C.2.c.(3)(b) of this proposed rule, we believe that setting a minimum volume threshold during the calendar year 2 years prior to the applicable ASM performance year for the heart failure EBCM and the low back pain EBCM as part of ASM participant eligibility criteria would mean that ASM heart failure participants and ASM low back pain participants would be likely to meet the same episode case minimum during each ASM performance year. We seek comment on the proposed case minimum of 20 attributed episodes for all cost measures at Sec. 512.730(d) used to score the cost ASM performance category. [[Page 32588]] (g) Cost Measure Achievement Points and Cost ASM Performance Category Scoring (i) Cost Measure Achievement Points We propose to follow a similar methodology for establishing and assigning measure achievement points as is used by MIPS. We propose at Sec. Sec. 512.730(e)(1)(i) and 512.730(e)(1)(ii) that for each cost measure attributed to an ASM participant, CMS assigns the ASM participant 1 to 10 achievement points (including partial points) based on the ASM participant's performance on the cost measure during the ASM performance year compared to the cost measure's benchmark. Achievement points are awarded based on which benchmark range the ASM participant's performance on the measure is in. (ii) Benchmarking We propose at Sec. 512.730(e)(2)(i) that CMS bases cost measure benchmarks on cost measure performance of ASM participants during the ASM performance year. To develop reliable cost measure benchmarks, we propose at Sec. 512.730(e)(2)(i)(A) that each benchmark must have a minimum of 20 ASM participants who meet the minimum case volume specified at Sec. 512.730(d) for CMS to determine a benchmark for the cost measure. We propose at Sec. 512.730(e)(2)(i)(B) if a benchmark is not determined for a cost measure, then the measure would not be scored. We propose at Sec. 512.730(e)(2)(ii) to score each EBCM using 10 benchmark ranges based on the median (that is, 50th percentile) cost of all ASM participants attributed the relevant measure plus or minus standard deviations. We propose at Sec. 512.730(e)(2)(ii) to center the 10 benchmarks ranges at half the measure achievement points achievable for each EBCM. Given that the measure achievement points range from 1 to 10, the ASM participant with the median cost would be assigned 6 EBCM measure achievement points. We would then determine the score ranges applicable to each of the 10 measure achievement points based on standard deviations above and below the median score. We propose to calculate these benchmark ranges separately for each EBCM. We believe the proposed benchmark ranges, calculated using the median and centered around half of the available points for each EBCM would be dynamic and responsive to changes in average spending per episode assessed by cost measures and performance thresholds for each ASM performance year. We would update the median and standard deviations used to determine cutoffs for benchmark ranges so that they are based on performance within the ASM performance year. To determine the benchmark ranges, we would adhere to the following principles: (1) determine benchmark ranges according to the distribution of the EBCM averages; and (2) ensure distribution of measure achievement points for cost measures is reflective of overall program performance. We refer readers to Table 40 for an example of how the proposed cost scoring methodology could be implemented for a specific cost measure. [GRAPHIC] [TIFF OMITTED] TP16JY25.112 We propose at Sec. 512.730(e)(2)(ii) to award up to 10 measure achievement points for each EBCM based on which benchmark range an ASM participant's EBCM average corresponds using the following formula: EBCM Achievement Points = Benchmark Range # + [(measure score, expressed as a dollar amount-bottom of benchmark range)/(top of benchmark range-bottom of benchmark range)]. This scoring methodology for cost measures would align the assignment of measure achievement points for cost measures so that participants with costs near the measure's median (that is, 50th percentile) would not receive a disproportionately low score. Rather participants with costs near the median would receive an individual EBCM score clustered closer to the median. We also considered using even decile benchmark ranges based on the distribution of each EBCM score. This alternative approach, however, would mean that ASM participants with EBCM averages near the 50th percentile would receive lower cost measure scores. Given the distribution of EBCM averages proposed for ASM, we believe even decile benchmark ranges would create narrow benchmark deciles that would result in a less accurate assessment of cost performance. For these reasons, we believe it would be more appropriate to use the proposed episode-based cost benchmarking and measure scoring methodologies. We seek comments on our proposed approach for assigning measure achievement points, calculating EBCM benchmarks and scoring each cost measure, as well as all alternatives considered. [[Page 32589]] (iii) Calculation of the Cost ASM Performance Category Score We propose at Sec. 512.730(e)(3) that the cost ASM performance category score would be calculated as the sum of the total number of measure achievement points earned by the ASM participant from each required measure divided by the total number of available measure achievement points for each required cost measure, not to exceed 100 percent, for ASM heart failure participants or ASM low back pain participants. As discussed in section III.C.2.d.(3)(g) of this proposed rule, we propose at Sec. 512.730(e)(3)(i) that an ASM participant who does not have 20 attributed episodes during an ASM performance year would not receive a cost ASM performance category score and would not receive a final score as discussed in section III.C.2.e.(b) of this proposed rule. We believe that this proposed cost ASM performance category score ensures that ASM participants can be appropriately held accountable on spending related to ASM's targeted chronic conditions. This proposed cost ASM performance category scoring methodology means that the cost ASM performance category would be equivalent to the score for the heart failure EBCM for ASM heart failure participants and the low back pain EBCM for ASM low back pain participants since each participant group is only scored on one cost measure. We propose at Sec. 512.730(e)(3)(ii) that if data used to calculate a score for a cost measure are impacted by significant changes or errors affecting the ASM performance year, such that calculating the cost measure score would lead to misleading or inaccurate results, then the affected cost measure is excluded from the ASM participant's cost performance category score and a cost performance category score is not calculated. We propose at Sec. 512.730(e)(3)(ii)(A) to define ``significant changes or errors'' regarding instances in which the cost measure score could not be calculated as changes or errors external to the care provided, and that CMS determines may lead to misleading or inaccurate results that negatively impact the measure's ability to reliably assess performance. We propose at Sec. 512.730(e)(3)(ii)(B) that significant changes or errors include, but are not limited to, rapid or unprecedented changes to service utilization, changes to codes (such as ICD-10, CPT or HCPCS codes), the inadvertent omission of codes or inclusion of codes, or changes to clinical guidelines or measure specifications. We also propose at Sec. 512.730(e)(3)(ii)(C) that we would empirically assess the affected cost measure to determine the extent to which the changes or errors impact the calculation of a cost measure score such that calculating the cost measure score would lead to misleading or inaccurate results that negatively impact the measure's ability to reliably assess performance. We believe these proposed policies would appropriately adapt the proposed cost ASM performance category scoring policies so that ASM participants would not be penalized for changes or errors in the measure and associated submitted data that would be outside the control of the ASM participant. We seek comments on our proposed methodology for calculating the cost ASM performance category score. (4) Proposed Improvement Activities ASM Performance Category The proposed requirements in the improvement activities ASM performance category aim to improve care coordination, increase collaboration between specialty and primary care, and better address upstream drivers of health for patients. These activities support the model goals to improve quality care as measured through a focused measure set relevant to ASM participants. They also support prevention efforts that incentivize ASM participants to ensure that their patients have a regular source of primary care and are screened to help identify early signs of chronic conditions. The improvement activities ASM performance category would be used to determine a potential scoring adjustment to the final score. We refer readers to sections III.C.2.e.(1) and III.C.2.e.(5) of this proposed rule for details on how the scores in the improvement activities scoring adjustment would be applied to the ASM final score. (a) Background The improvement activities ASM performance category provides ASM participants with an opportunity to support broader improvements in health care delivery. Improvement activities originated in MIPS to improve care coordination, foster beneficiary engagement, and advance population health management as described at Sec. 414.1355. ASM leverages this structure and proposes at Sec. 512.705 to define ``improvement activities'' as activities relating to care coordination, integration of specialty and primary care, and addressing health- related social needs of patients. Care coordination helps to ensure that all healthcare providers involved in a patient's care have appropriate access to relevant patient information and are working towards the same care goals. The exchange of up-to-date and detailed patient information among healthcare providers can improve patient outcomes, safety, and support clinical decision making.\217\ Integration of specialty and primary care would also positively impact the patient experience. A 2022 study examining fragmentation in ambulatory care for Medicare FFS beneficiaries found that 4 in 10 beneficiaries experience highly fragmented care, with a mean of 13 ambulatory visits across seven practitioners in 1 year.\218\ By providing a more seamless and coordinated approach to beneficiary care, providers reduce the need for patients to spend as much time navigating the health care system and lower any undue costs for patients that may be associated with an increased number of clinical visits and services. This approach also can prevent the worsening of disease by ensuring all parties are aware of a patient's needs, aligned with a care plan, and receiving appropriate prevention and screening services. We borrow elements from the care coordination improvement activity subcategory of MIPS to align with activities in which organizations may already be engaged. --------------------------------------------------------------------------- \217\ Foy R. Meta-analysis: Effect of Interactive Communication Between Collaborating Primary Care Physicians and Specialists. Annals of Internal Medicine. 2010;152(4):247. doi:https://doi.org/10.7326/0003-4819-152-4-201002160-00010. \218\ Centers for Medicare & Medicaid Services. CMS Innovation Center's Strategy to Support Person-Centered, Value-Based Specialty Care. CMS.gov Blog. Published October 19, 2023. https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care (accessed 2/24/25). --------------------------------------------------------------------------- Consistent with our model goals, we believe it is important to create a single set of achievable improvement activities that are applicable to all ASM participants. We took several steps to ensure these improvement activities are consistent with our intent to improve meaningful coordination and collaboration. We developed the measures for this ASM performance category based on our review of feedback provided in response to our RFI (89 FR 61596), interviews with interested parties, and an environmental scan of existing practice coordination activities from the Quality Payment [[Page 32590]] Program and other Innovation Center models.\219\ --------------------------------------------------------------------------- \219\ Medicare and Medicaid Programs; CY 2025 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare Overpayments. --------------------------------------------------------------------------- (b) Performance Year for Improvement Activities Beginning with ASM payment year 2029, we propose at Sec. 512.735(a) that the ASM performance year for improvement activities would be a minimum of a continuous 90-day period within the calendar year that occurs 2 years prior to the applicable ASM payment year, up to and including the full calendar year. We believe that setting the ASM performance year for improvement activities in this way aligns with MIPS as defined at Sec. 414.1320 and would be easily adoptable by ASM participants. We seek comments on this proposal. (c) Improvement Activities We propose at Sec. 512.735 the establishment of the improvement activities ASM performance category. We propose at Sec. 512.735(c) to establish the following ASM improvement activities : (1) Improvement Activity 1 (IA-1): Connecting to Primary Care and Ensuring Completion of Health-Related Social Needs Screening and Improvement Activity 2 (IA-2): Establishing Communication and Collaboration Expectations with Primary Care using Collaborative Care Arrangements. (i) Improvement Activity 1 (IA-1): Connecting to Primary Care and Ensuring Completion of Health-Related Social Needs Screening In IA-1, we propose at Sec. 512.735(c)(1) to require annual attestations by ASM participants on activities related to enhancing connections to and relationships with primary care. As the first part of IA-1, we propose at Sec. 512.735(c)(1)(i) that ASM participants develop processes and workflows within their practices to identify patients without a PCP and assist them in finding one. Primary care is a vital resource for patients, providing an efficient and accessible level of care. We believe it is essential that the vast majority of patients have a PCP who can coordinate their overall health care needs, manage chronic conditions, and serve as the first point of contact for health concerns. However, some patients may not have a designated PCP, which can lead to fragmented care and suboptimal health outcomes. A 2022 study found that up to a third of Medicare beneficiaries don't see a PCP yearly.\220\ Furthermore, we believe that connecting patients with a PCP could help reduce demand on specialists in situations where the patient could more appropriately be treated in the primary care setting. Continuity with a primary care practice or provider also has the potential to reduce costs.\221\ We believe specialists can play a crucial role in ensuring that their patients have access to these high- value primary care services. As part of IA-1, we also propose at Sec. 512.735(c)(1)(ii) to require that the ASM specialist always communicate relevant information back to the ASM beneficiary's PCP following the ASM beneficiary's visit with the ASM participant. This exchange of information is important to patient care planning and is an aspect of specialty care and primary care collaboration that has room for improvement.\222\ --------------------------------------------------------------------------- \220\ Barnett ML, Bitton A, Souza J, Landon BE. Trends in Outpatient Care for Medicare Beneficiaries and Implications for Primary Care, 2000 to 2019. Annals of Internal Medicine. Published online November 2, 2021. doi:https://doi.org/10.7326/m21-1523. \221\ Yang Z, Ganguli I, Davis C, et al. Physician[hyphen] versus practice[hyphen]level primary care continuity and association with outcomes in Medicare beneficiaries. Health Services Research. 2022;57(4):914-929. doi:https://doi.org/10.1111/1475-6773.13999. \222\ Timmins, Lori, et al. ``Communication Gaps Persist between Primary Care and Specialist Physicians.'' The Annals of Family Medicine, vol. 20, no. 4, 1 July 2022, pp. 343-347, www.annfammed.org/content/20/4/343, https://doi.org/10.1370/afm.2781. --------------------------------------------------------------------------- As the final element of IA-1, we propose at Sec. 512.735(c)(1)(iii) that ASM participants collaborate with PCPs to ensure that their patients have received HRSN screenings. In addition to ensuring access to primary care, we also recognize the importance of addressing patients' upstream drivers of health. These factors, such as housing, food insecurity, transportation, and financial constraints, are common in the Medicare population. One study found that of approximately 68,000 Medicare Advantage patients who responded to a HRSN screening, 33 percent experienced financial strain, 18.5 percent experienced food insecurity, and 17.7 percent had poor housing quality.\223\ These unmet needs can significantly impact a patient's well-being and contribute to the development or exacerbation of diseases, lead to unnecessary health care costs, and worsen overall outcomes.\224\ HRSN screening also has the opportunity to open a dialogue between the patient and provider about lifestyle factors, such as diet and physical activity. This discussion with the provider and associated education can promote the adoption of a healthier lifestyle, thereby mitigating the presence of new or worsening diseases. Feedback from interested parties has indicated that PCPs are best equipped to conduct HRSN screenings and may have established relationships with community resources to address identified needs. While specialists may not have the resources to conduct HRSN screenings or be the most appropriate provider to address these concerns, we believe they should have some responsibility in ensuring HRSN screenings have been completed, considering unmet social needs can have a direct impact on the medical condition(s) they are managing. If a specialist identifies that a patient has not received an annual HRSN screening, they should communicate this information to the patient's PCP and encourage them to conduct the screening and initiate any necessary follow-up action(s). The specialist may also choose to conduct the screening themselves, as long as they communicate the results and any follow-up actions to the patient's PCP. --------------------------------------------------------------------------- \223\ Long CL, Franklin SM, Hagan AS, et al. Health-Related Social Needs Among Older Adults Enrolled In Medicare Advantage. Health Affairs. 2022;41(4):557-562. doi:https://doi.org/10.1377/hlthaff.2021.01547. \224\ ROI Calculator for Partnerships to Address the Social Determinants of Health Review of Evidence for Health-Related Social Needs Interventions. (2019). https://www.commonwealthfund.org/sites/default/files/2019-07/COMBINED-ROI-EVIDENCE-REVIEW-7-1-19.pdf. --------------------------------------------------------------------------- (ii) Improvement Activity 1 (IA-1) Specifications IA-1 Name. Connecting to Primary Care and Ensuring Completion of Health-Related Social Needs Screening IA-1 Specifications ASM participants must have evidence of processes, workflows, and/or technology that require the ASM participant to: (1) confirm the ASM beneficiary has access to primary care services and, if not, assist the ASM beneficiary in finding a clinician who provides primary care services, (2) communicate relevant information back to the ASM beneficiary's primary care provider following the ASM beneficiary's visit with the ASM participant, and (3) determine whether the ASM beneficiary has received an annual HRSN screening in the primary care setting and, if not, encourage the primary care services provider to conduct the screening or allow the ASM participant to conduct the HRSN screening. [[Page 32591]] Evidence can include items such as the following: Documented workflows or protocols outlining the process for identifying patients without a designated PCP, assisting patients in finding and establishing care with a PCP (such as practice intake forms or integrated into normal practice in the patient's visit), sharing relevant information (test results, treatment plans, follow-up recommendations) with the patient's PCP after each visit, confirming if the patient has completed an annual HRSN screening, or conducting or communicating with the PCP to conduct an annual HRSN screening if it has not been done. EHR system configurations or templates, or other health IT tools, that facilitate capturing and documenting the patient's PCP information, generating and sending visit summaries or reports to the PCP, or recording HRSN screening status and prompting follow-up actions. Staff training materials or competency assessments related to identifying patients without a PCP and assisting them in finding one, proper documentation and communication of information to the PCP, or inquiring about HRSN screening status and initiating appropriate follow-up. Audit trails or reports from the EHR or practice management system demonstrating patients who were identified as not having a PCP and the actions taken, visit summaries or reports sent to the PCP after each patient encounter, or patients who were confirmed to have completed an annual HRSN screening or underwent one or were referred to the PCP for one. (iii) Improvement Activity 2 (IA-2): Establishing Communication and Collaboration Expectations With Primary Care Using Collaborative Care Arrangements In IA-2, we propose at Sec. 512.735(c)(2) to require annual attestations by ASM participants on activities related to establishing collaboration expectations with primary care. We believe that formalizing the collaborative relationship between ASM participants and PCPs through a collaborative care arrangement (CCA) is an important step to reduce patient fragmentation of care and ensures vital coordination activities are occurring. As discussed further below, we propose defining ``collaborative care arrangement'' to mean an arrangement that complies with all of the requirements set forth in Sec. 512.771. We also propose to define ``ASM beneficiary'' at Sec. 512.705 as a Medicare FFS beneficiary who is being treated by an ASM participant for a targeted chronic condition. There are several possible aspects to a CCA, but the goal of the CCA is to set forth expectations between the parties to facilitate primary care and specialty care integration for the benefit of the patient while ensuring both parties are held accountable for how they fulfill their duties. To receive achievement points for IA-2, we propose at Sec. Sec. 512.735(c)(2)(i) and (ii) that the ASM participant must enter into at least one CCA with a primary care practice that includes at least three of the following five following collaborative elements: data sharing, co-management, transitions in care planning, closed-loop connections, and care coordination integration as proposed at Sec. Sec. 512.735(c)(2)(ii)(A) through (E). All of these CCA elements support an important prevention framework by promoting a seamless information ecosystem where providers collaborate to detect health risks before they occur and optimize care through communication. These elements also have properties that may overlap in their implementation with each other and IA-1, which together further the goals of the improvement activities ASM performance category. The sharing of data back to PCPs is crucial for ensuring continuity of care for shared patients. Specialists should have clear processes in place to provide timely updates, test results, treatment plans, and follow-up recommendations to the patient's PCP, even outside the time of a referral between the parties. We also believe this exchange should be bi-directional, so that both entities have a comprehensive understanding of the patient's condition and can provide appropriate follow-up care and management. Co-management is a collaborative approach where specialists and PCPs work together to provide coordinated care for patients with complex or chronic conditions. Generally, the different types of co- management include consultative co-management, where the specialist provides consultation and recommendations to the PCP who remains the primary manager of the patient's care; shared co-management, where both the specialist and PCP actively participate in managing the patient's care with clearly defined roles and responsibilities; and principal co- management, where the specialist takes the lead in managing the patient's condition while the PCP provides overall coordination and management of other aspects of the patient's care.\225\ The benefits of co-management include shared decision-making and treatment planning, consistent monitoring and follow-up of the patient's condition, reduced duplication of tests and procedures, enhanced patient education and self-management support, and better management of comorbidities and potential drug interactions. Additionally, we believe co-management can lead to better health outcomes, improved patient satisfaction, and potentially lower health care costs by reducing fragmentation and unnecessary utilization of health care resources. --------------------------------------------------------------------------- \225\ Kuo D, Gifford DR, Stein MD. A typology of specialists' clinical roles. Arch Intern Med. 2009;169(11):1062-1068. doi:10.1001/archinternmed.2009.114. --------------------------------------------------------------------------- Transition in care planning refers to the processes and protocols in place for seamlessly transitioning a patient's care between specialists and PCPs, or between different care settings (for example, hospital to outpatient care).\226\ Care planning can include follow-up appointments, medication reconciliation, and clear communication of the treatment plan. We believe effective transitions in care planning can help prevent gaps in care, reduce hospital readmissions, and ensure continuity of care for the patient. It may also involve defining roles and responsibilities for coordinating care, conducting warm handoffs, and ensuring timely follow-up appointments. When meaningfully implemented, it promotes a seamless and coordinated approach to care, where all providers involved have a shared understanding of the patient's needs and can work together to provide high-quality, patient- centered care. --------------------------------------------------------------------------- \226\ Smith, Lucia Rojas, et al. Care Transitions Framework. www.ncbi.nlm.nih.gov, Agency for Healthcare Research and Quality (US), 1 Mar. 2014, www.ncbi.nlm.nih.gov/books/NBK196206/. --------------------------------------------------------------------------- Closed-loop communication and feedback between specialists and PCPs involve establishing a structured and coordinated process for when the patient is referred from primary care to specialty care and back. The model considers this to include elements such as structured referral templates, communication and information sharing, collaborative treatment planning, and shared monitoring of patient outcomes. By coordinating care effectively, providers can identify and address potential issues or gaps in care, reduce duplication of services or tests, and ensure that patients receive appropriate and timely care, ultimately improving quality and preventing [[Page 32592]] unnecessary utilization of health care resources.\227\ --------------------------------------------------------------------------- \227\ Murray M. Reducing Waits and Delays in the Referral Process. Family Practice Management. 2002;9(3):39-42. https://www.aafp.org/pubs/fpm/issues/2002/0300/p39.html. --------------------------------------------------------------------------- Care coordination activities generally refer to efforts by the ASM participant to identify areas of their practice that could be improved by codified workflows or initiatives, as well as establishment of these activities collaboratively with the partnered primary care practice. These innovations support an environment of continuous improvement for practices and positive outcomes for their shared patients. When selecting primary care practices for CCAs, ASM participants must ensure the CCA is with a primary care practice with whom they share at least one ASM beneficiary. We recommend that the ASM participant explore entering into a CCA with a primary care practice with whom the ASM participant shares a meaningful portion of their Medicare patients, to maximize the impact of the CCA activities. That is, ASM participants should seek to enter into an CCA with another primary care practice with which they share the largest number of ASM beneficiaries. If that is not feasible, then ASM participants should seek to enter into a CCA with a different primary care practice that they share a significant portion of ASM beneficiaries with. (iv) Improvement Activity 2 (IA-2) Specifications IA-2 Name. Establishing Communication and Collaboration Expectations with Primary Care Practices using Collaborative Care Arrangements IA-2 Specifications. Documentation of at least one executed CCA between a primary care practice with which the ASM participant shares ASM beneficiaries, and the CCA must include collaborative efforts related to at least three of the following five elements: Data Sharing. Setting expectations for bi-directional sharing of patient information between the parties to the CCA, including but not limited to test results, treatment plans, and follow- up recommendations. This is aimed toward population health management of shared patients and is not necessarily coordinated around a specific referral episode. Elements may include: (1) evidence that the ASM participant always sends a report to the referring PCP; or (2) a process for capturing referral information that the ASM participant has a defined method for capturing reports from the primary care provider in the medical record, for example: reports transmitted between EHRs; documents that are electronically scanned and linked to the patient's EHR; or chart documentation of the relevant details of the specialist- patient interaction, such as notes written into a progress note. Co-Management. Criteria that define co-management approaches, where the parties to the CCA work together to furnish complementary care for patients with complex or chronic conditions. The criteria should clearly set forth the available co-management approaches. Examples of such co-management relationships may include: (1) consultative co-management, (2) shared co-management, or (3) principal co-management. Transitions in Care. Defined protocols for seamless transitions of care between ASM participants, the primary care practice, or different care settings. Elements may include: (1) patient-centered care transition action plans, such as documented plans from the ASM participant to the PCP, including outpatient follow-up recommendations, medication reconciliation, and any necessary post- transition support; (2) implementation of the transition plan, including documentation of staff involved in the care transition, records of real-time communication between the ASM participant and the primary care practice, and ensuring the primary care practice is included in any follow-up transition communication; or (3) care transition planning processes, which outline steps the ASM participant would take to prepare and implement the patient-centered care transition plan when transferring care to the PCP. Closed-Loop Communication. Clearly articulated processes enforcing parameters on how ASM beneficiaries may be referred between the parties to an executed CCA. These structured and enhanced referral processes would add efficiency to communications between the parties to the CCA and ensure expectations around what is needed for effective specialty consultation and collaboration. Examples of provisions that should be included are as follows: (1) expectations for the structure, elements, and flow of information and responsibilities between practices during a referral; (2) monitoring of shared ASM beneficiaries through the entire process to ensure proper follow-up, integration of information, and maintenance of beneficiary choice; and (3) integration of information from the closed-loop connection into the ASM beneficiary's plan of care. Care Coordination Integration. Structured processes to embed care coordination processes into the ASM participant's practice workflow. Such processes may include: (1) activity records documenting the implementation of care coordination activities with the primary care practice, such as meeting minutes on process improvements, workflow diagrams, training syllabi for training staff on new processes, copies of old and new processes on documenting care coordination activities; or (2) outcome measures demonstrating changes attributable to newly implemented care coordination processes. We seek comments on the goals and specifications of the required improvement activities proposed at Sec. 512.735(b) and (c). (d) Improvement Activities Data Submission, Achievement Points, ASM Performance Category Scoring We propose ASM participants must submit data on ASM improvement activities in the form of attestations meeting the submission requirements at Sec. 512.720. We propose at Sec. 512.735(d)(1) and (2) that ASM participants would receive 10 measure achievement points for reporting ``yes'' for each improvement activity specified at Sec. 512.735(c) in accordance with the data submission requirements at Sec. 512.720(a). We would sum the total achievement points for all submitted improvement activities and divide this sum by the total number of available achievement points for the required improvement activities as specified in paragraph Sec. 512.735(c), not to exceed 100 percent. In our proposals, both improvement activities would be weighted the same, each accounting for half of the potential improvement activities ASM performance category scoring adjustments to the final score. We considered differential weighting, with IA-1 comprising a smaller number of points for the scoring adjustment. The activities in IA-1, such as sharing patient information back to a PCP after a specialist visit, should already be occurring, whereas activities in IA-2, like the creation of a CCA, are less common and potentially more time consuming. We decided to propose to weight the improvement activities equally, each accounting for the same number of potential points in the improvement activities ASM performance category scoring adjustment, acknowledging the burden that these improvement activities may present to practices. For example, if an ASM participant is already conducting [[Page 32593]] activities that satisfy IA-1 specifications but do not satisfy IA-2 specifications in the 2027 ASM performance year, they would still be awarded 10 measure achievement points and an improvement activities ASM performance category score of 50 percent. We believe IA-1 would be achieved by the vast majority of ASM participants with limited effort, which may lessen the concern of initial improvement activity burden and impact to the ASM participant's overall score. Simultaneously, we want to promote specialty collaboration with primary care, thus if ASM participants do not achieve the expectations in IA-2, the ASM participant would only receive 10 measure achievement points. If ASM participants do not complete the requirements for IA-1 and do not complete the requirements for IA-2, they would receive zero measure achievement points and an improvement activities ASM performance category score of zero percent. We seek comments on our improvement activities ASM performance category scoring approach at Sec. 512.735(d)(1) and (2) and alternative improvement activity weighting and scoring options. (5) Proposed Promoting Interoperability ASM Performance Category Our long-term goal for the Promoting Interoperability performance category is to ensure the meaningful use of CEHRT and information exchange throughout the year, for all data, all clinicians, and all patients. We believe it is important to leverage the Promoting Interoperability ASM performance category for scoring adjustments to the final score, as discussed in section III.C.2.e. of this proposed rule. (a) Background This section includes proposals for the performance year for Promoting Interoperability measures, the requirement for CEHRT use and related attestations, data submission criteria and scoring for the ASM Promoting Interoperability performance category. The Promoting Interoperability performance category score would be used to determine the Promoting Interoperability performance category scoring adjustment applied to the final score. (b) ASM Performance Year for the Promoting Interoperability ASM Performance Category At Sec. 512.740(a), we propose the ASM performance year for Promoting Interoperability category. Beginning with ASM payment year 2029, the performance year for Promoting Interoperability measures is the minimum of a continuous 180-day period within the calendar year that occurs 2 years prior to the applicable ASM payment year, up to and including the full calendar year. Reporting for this period would provide ASM participants with the opportunity to continuously monitor their performance, identify gaps in reporting and identify areas that may require investigation and corrective action. Additionally, this performance period aligns with the MIPS performance period established for the MIPS Promoting Interoperability performance period established at Sec. 414.1320(i)(1). We believe that alignment of the performance period between MIPS and the ASM model supports ASM participant's transition from MIPS to ASM. We seek comments on our proposal at Sec. 512.740(a) for the 180- day performance period for Promoting Interoperability measures. (c) Reporting for the Promoting Interoperability Performance Category We propose at Sec. 512.740(b) to earn a performance category score for the Promoting Interoperability Performance category for inclusion in the final score, an ASM participant must be a meaningful EHR user. A meaningful EHR user means an ASM participant who possesses CEHRT, uses the functionality of CEHRT, reports on applicable objectives and measures specified for the Promoting Interoperability performance category for a performance period in the form and manner specified by CMS, and engages in activities related to supporting providers with the performance of CEHRT. We are proposing to not include additional provisions related to information blocking as defined at 45 CFR 171.103 in the definition of a meaningful EHR user. The Promoting Interoperability ASM performance category would focus on the safe use and exchange of patient data. Our requirements to demonstrate meaningful CEHRT use through reporting Promoting Interoperability measures are discussed later in this section of this proposed rule. (i) Required CEHRT Use We propose our requirement for CEHRT use at Sec. 512.740(b)(1) that ASM participants are required to provide evidence, in a form and manner specified by CMS, demonstrating use of CEHRT to fulfill the Promoting Interoperability measure requirements (as defined by a meaningful EHR user at Sec. 414.1305) and receive a score greater than zero percentage points for the Promoting Interoperability ASM performance category. ASM participants must use certified health IT that meets the definition of CEHRT at Sec. 414.1305 (which references health IT certification criteria finalized at 45 CFR 170.315) to receive a score greater than zero for the Promoting Interoperability ASM performance category. To demonstrate evidence of CEHRT use, ASM participants would be required to provide their EHR's CMS identification ID from the Certified Health IT Product List, available on HealthIT.gov. We believe requiring the use of CEHRT supports the goals of ASM by helping enable: (1) meaningful EHR use, further measured by ASM's proposed Promoting Interoperability measures; (2) reporting of clinical quality measures, including eCQMs; (3) interoperability and data sharing between providers and with patients to drive better patient care, care coordination, and primary and specialty care integration; and (4) continuous practice-based quality improvement and care transformation. To promote standardization, we align with the definition of CEHRT at Sec. 414.1305 used across CMS in other Promoting Interoperability and quality reporting programs. For example, CEHRT use is required for eligible clinicians participating in the MIPS program as stated at Sec. 414.1375(b)(1). In addition to requiring use of CEHRT, we are also maintaining the requirement ASM participants submit confirmation of the following to earn a score for this category: The Office of the National Coordinator for Health Information Technology (ONC) Direct Review attestation at 45 part 170, subpart E. The Security Risk Assessment Measure. The High Priority Practices Guide of the Safety Assurance Factors for EHR Resilience (SAFER) Guides \228\ Measure. --------------------------------------------------------------------------- \228\ https://www.healthit.gov/topic/safety/safer-guides. --------------------------------------------------------------------------- We are proposing to not include the Actions to Limit or Restrict Compatibility or Interoperability of CEHRT attestation in ASM at this time. We believe maintaining the ONC Direct Review process (45 CFR part 170, subpart E) in ASM increases accountability among certified health IT developers and vendors by ensuring ASM participants' Health IT Module \229\ conforms to ONC's Health IT Certification Program requirements not [[Page 32594]] only during implementation of CEHRT, but also while CEHRT is being used during patient care and in care delivery. --------------------------------------------------------------------------- \229\ 45 CFR 170.102. --------------------------------------------------------------------------- The Security Risk Analysis and SAFER measures are designed to optimize the safety of ASM participants' EHR systems. We propose at Sec. 512.740(b)(3)(ii) that an ASM participant must complete the activities included in the Security Risk Analysis measure within the calendar year of the ASM performance year. This aligns with a MIPS requirement for eligible clinicians in MIPS as stated at Sec. 414.1375(b)(2)(ii)(A); ASM participants that previously participated in MIPS are likely familiar with these requirements. The security risk analysis is conducted to protect the security of individually identifiable health information and the systems that are used to create, receive, maintain, or transmit such information. An ASM participant would conduct a security risk analysi \230\ in accordance with 45 CFR 164.308(a)(1)(A). As part of the security risk analysis, ASM participants would be required to address the security of electronic protected health information (ePHI) created, received, maintained, or transmitted by CEHRT, including whether it would be reasonable and appropriate in the participants' specific circumstances to encrypt ePHI in their CEHRT in accordance with requirements in 45 CFR 164.306(d)(3) and 45 CFR 164.312(a)(2)(iv), implement security updates as necessary, and correct identified security deficiencies as part of the ASM participant's risk management process. --------------------------------------------------------------------------- \230\ Security Risk Analysis: https://qpp.cms.gov/docs/pi_specifications/Measure%20Specifications/2025-MIPS-Promoting%20Interoperability-Measure-Security-Risk-Analysis.pdf. --------------------------------------------------------------------------- We also propose at Sec. 512.740(b)(3)(iii) that the ASM participant must confirm the ASM participant's completion of the annual self-assessment under the SAFER Guides measure within the calendar year of the ASM performance year. The High Priority Practices SAFER Guide \231\ is used as an annual self-assessment to support consistent safety practices for all EHR users and further enable the electronic exchange of health information. This aligns with a requirement for eligible clinicians in MIPS as stated at Sec. 414.1375(b)(2)(ii)(D). --------------------------------------------------------------------------- \231\ SAFER Guides. https://qpp.cms.gov/docs/pi_specifications/Measure%20Specifications/2025-MIPS-Promoting-Interoperability-Measure-High-Priority-Practices-Guide-of-SAFER-Guides.pdf. --------------------------------------------------------------------------- Together, we believe these measures drive more secure, efficient, and meaningful use of CEHRT and health IT in ASM. Furthermore, given current and historical requirements in the Promoting Interoperability performance category in MIPS, these requirements are likely familiar and already implemented, or readily implementable, for many ASM participants. We considered the alternative of allowing identified ASM participants without CEHRT to opt-out of participating in ASM. However, we would be concerned an opt-out would: (1) disincentivize the adoption of CEHRT and participation of specialists in value-based payment models, (2) be challenging for CMS to operationalize and audit, and (3) potentially result in a reduction in participant volume that would significantly affect ASM's impact and evaluability. We recognize there are underlying reasons why certain practices have yet to adopt CEHRT and that these practices currently not on CEHRT may share certain characteristics, such as smaller practice sizes with 15 or fewer clinicians, as defined at Sec. 414.1305. To support these practices, we propose additional policies and flexibilities in ASM, such as the complex patient scoring payment adjustment described in section III.C.2.e.(3) of this proposed rule and the small practice scoring adjustment described in section III.C.2.e.(4) of this proposed rule, with the goal of not inadvertently penalizing these practices, particularly those who disproportionally care for populations with higher medical complexity and social risk. We also considered the alternative of requiring CEHRT but not requiring CEHRT-related attestations and requirements mentioned earlier, such as the Security Risk Assessment and SAFER Guides measures. We decided to include them given they help ensure safer and more meaningful use of CEHRT amongst ASM participants. Because they have been a consistent part of MIPS reporting in the past, ASM participants are likely familiar with these attestations and measures, which could help reduce burden. We also considered the alternative of not requiring CEHRT to achieve a Promoting Interoperability ASM performance category score greater than zero. However, we were concerned this would deviate from existing MIPS policy and may disincentivize CEHRT adoption among ASM participants. Furthermore, requiring CEHRT to achieve a Promoting Interoperability category score underscores the role CEHRT plays in providing foundational IT capabilities to enable the reporting of quality data and inclusion of additional IT functionality, such as e- prescribing and health information exchange (HIE), which is captured in ASM's Promoting Interoperability measures. CEHRT use plays an important role in helping ASM participants improve and transform care for Medicare beneficiaries with chronic conditions, whether through electronic clinical decision support, physician order entry or exchanging electronic health information with other clinicians or health care settings. Lastly, we considered inclusion of The Actions to Limit or Restrict Compatibility or Interoperability of CEHRT attestation in ASM as it would help ensure that ASM participants are acting in good faith when implementing and using CEHRT to exchange electronic health information, and not knowingly and willfully taking action to limit or restrict the compatibility or interoperability of CEHRT. We request comments on our proposals to require that ASM participants use CEHRT to receive a score for the ASM Promoting Interoperability performance category. We also seek comments on the definition of meaningful EHR user and other alternatives discussed in this section of this proposed rule that would be required for ASM participants to achieve a Promoting Interoperability ASM performance category score greater than zero; this includes allowing for a CEHRT- related opt-out, not requiring CEHRT, and requiring the Actions to Limit or Restrict Compatibility or Interoperability of CEHRT attestation. (ii) Promoting Interoperability Objectives and Measures To receive a score for the ASM Promoting Interoperability performance category, clinicians must complete the relevant attestations and measures related to CEHRT and report Promoting Interoperability objectives and measures. Our Promoting Interoperability objectives and measures align with model goals and objectives and measures used in other CMS programs, including MIPS. We propose at Sec. 512.740(b)(2) that an ASM participant must report on objectives and associated MIPS measures specified by CMS to assess performance in the Promoting Interoperability ASM performance category. We propose at Sec. 512.740(b)(2) that an ASM participant must fulfill the following requirements to earn an ASM performance category score for the Promoting Interoperability performance category: For each measure, as applicable, ASM participants would report the numerator (of at least one) and denominator, or yes/no statement or an exclusion for each measure that includes an option for an exclusion. We would require ASM participants to report all Promoting Interoperability [[Page 32595]] measures at the TIN/NPI level, which is consistent with the methodology used to identify eligible ASM participants, as described in section III.C.2.c.(3)(a)(i) of this proposed rule. We considered allowing for TIN-level reporting for Promoting Interoperability measures but decided to prioritize maintaining individual accountability and robust comparisons among ASM heart failure participants or ASM low back pain participants. We propose at Sec. Sec. 512.740(b)(2)(i) through (iv) that ASM participants must attest to the objectives and associated measures for the ASM performance year. The Promoting Interoperability measures support the following objectives: Electronic Prescribing, HIE, Provider to Patient Exchange, and Public Health and Clinical Data Exchange, as shown in Table 41. The objectives encourage leveraging the electronic exchange of health information, with a focus on the safety of prescribing medications, communication between clinicians, patient access to their health information and reporting essential health data to public health agencies. BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TP16JY25.113 BILLING CODE 4120-01-C As discussed earlier in this section of this proposed rule, ASM participants would be required to submit collected data for the required measures in each objective (unless an applicable exclusion is claimed) for the same 180 continuous days (or more) during the calendar year. Given these measures have remained consistent, required measures in MIPS, as stated at Sec. 414.1375(b)(2), they are likely familiar with the measure specifications and implemented by many MIPS clinicians, which represents a substantial portion of potential ASM participants. We believe these measures align with the goals of ASM and reflect meaningful use of CEHRT. Electronic prescribing and provider to patient exchange, for example, through a patient portal, support patient-centered care and [[Page 32596]] improve communication between patients and providers. Interoperability is needed for effective collaboration between specialists and PCPs (aligning with the goals and activities of ASM's improvement activities), comprehensive care coordination, and seamless transitions of care. Of the measures in the Public Health and Clinical Data Exchange category in MIPS, we would include the required measures only (Immunization Registry Reporting and Electronic Case Reporting) in ASM as they provide critical information to the mission and operations of our public health agencies. The other measures in this category (Public Health Registry Reporting, Clinical Data Registry Reporting, and Syndromic Surveillance Reporting) would remain optional in ASM. Given these measures have been a stable part of the MIPS Promoting Interoperability measure set, keeping them optional allows for ease of reporting for ASM participants who may already have developed workflows and infrastructure to capture this data. (iii) Adding, Removing, and Modifying Measures We propose to avoid making significant changes to these measure sets over the period of model; however, we may propose to add or remove measures in response to relevant public comments, recommendations from participants and their collaborators, new CMS program activities, or significant changes to the included measures. Note, because the measures currently proposed are all part of MIPS, any updates CMS applies to the measures within MIPS would be incorporated into the Promoting Interoperability ASM measure sets accordingly. Alternatively, we considered adopting the MIPS Promoting Interoperability measures, but requiring notice and comment rulemaking before adopting any modifications made to the measures' specifications specified by CMS through rulemaking for MIPS. We seek public comments on these proposals on Promoting Interoperability measures and objectives and proposed alternative for adopting modifications made to the MIPS Promoting Interoperability measure specifications specified by CMS through rulemaking. (iv) Supporting Use of CEHRT ASM aims to support the electronic exchange of health information using CEHRT to improve patient care and coordination of care. We propose at Sec. 512.740(b)(4) requirements to support the use of CEHRT. Supporting the use and performance of CEHRT. We propose at Sec. 512.740(b)(4)(i)(A)(1) and (2) that the ASM participant support use of CEHRT by providing acknowledgement of the requirement to cooperate in good faith with ONC direct review of the ASM participant's health information technology certified under the ONC Health IT Certification Program if a request to assist in ONC direct review is received; and if requested, cooperate in good faith with ONC direct review of the ASM participant's health information technology certified under the ONC Health IT Certification Program as authorized by 45 CFR part 170, subpart E, to the extent that such technology meets (or can be used to meet) the definition of CEHRT, including by permitting timely access to such technology and demonstrating its capabilities as implemented and used by the ASM participant in the field. Furthermore, we propose at Sec. 512.740(b)(4)(i)(B) that an ASM participant has the option to attest to the following objectives and measures: at Sec. 512.740(b)(4)(i)(B)(1) that the ASM participant acknowledges the option to cooperate in good faith with ONC-ACB surveillance of his or her health information technology certified under the ONC Health IT Certification Program if a request to assist in ONC-ACB surveillance is received; and at Sec. 512.740(b)(4)(i)(B)(2) if requested, that the ASM participant cooperate in good faith with ONC-ACB surveillance of the ASM participant's health information technology certified under the ONC Health IT Certification Program as authorized by 45 CFR part 170, subpart E, to the extent that such technology meets (or can be used to meet) the definition of CEHRT, including by permitting timely access to such technology and demonstrating its capabilities as implemented and used by the ASM participant in the field. Proposals to support providers with the performance of CEHRT aligns with requirements of the MIPS program as finalized at Sec. 414.1375(b)(3)(i) through 414.1375(b)(3)(i)(B)(2). We seek comments on our policies supporting the use and performance of CEHRT. (d) Alternatives Considered for the Promoting Interoperability Reporting Requirements We considered alternatives for the Promoting Interoperability reporting requirements. Our proposals mostly align with reporting requirements for the Promoting Interoperability performance category with the MIPS program for multiple reasons. Aligning with MIPS Promoting Interoperability objectives and measures where appropriate promotes standardization across CMS and its programs. Measure alignment can also reduce confusion, burden, and operational complexity for ASM participants by limiting the need for ASM participants to implement different specifications for potentially similar or related measures. Furthermore, the MIPS Promoting Interoperability measure set has been stable for several years and has been successfully reported in MIPS by most of its participants. Therefore, we do not believe it would be an undue burden for ASM participants to continue reporting these measures, particularly given they support the goals of ASM. In our first alternative, we considered requiring reporting for CEHRT attestation, the ONC Direct Review Attestation, the Security Risk Assessment Measure, and the Safety Assurance Factors for EHR Resilience (SAFER) Guides Measure; each of these items is required in MIPS to get a Promoting Interoperability performance category score greater than zero. This option would not require specific reporting of Promoting Interoperability measures. We also considered a second alternative that would require the attestations in the first alternative as well as reporting one of the Health Information Exchange options. We believe this option would emphasize the importance of health information exchange to the ASM. A third alternative we considered was to adopt, by reference, the provisions of MIPS for the PI category, including both the measures and scoring policies. We also considered deferring the PI category measures within ASM to the PI category within MIPS such that the ASM would automatically update to align with MIPS for each future ASM performance year. Aligning with the PI category within MIPS would reduce complexity for ASM participants, especially those who have been participating in MIPS. While we believe this would limit confusion and align objectives across CMS, we decided that this could introduce risk to ASM insofar changes to the PI category could be introduced in MIPS that may not align with ASM's goals and priorities; in these cases, ASM could consider not adopting or delaying adoption of these changes. We believe that maintaining the PI category in ASM through rulemaking would be the better approach; however, we invite comment on the merits of ASM deferring measure selection and scoring to the MIPS PI category. [[Page 32597]] A fourth alternative would be to develop new Promoting Interoperability measures specific to ASM. While new measures could potentially more meaningfully capture the use of health IT in patient care, we were concerned about the feasibility of new measure development and the operational challenges that would be imposed on ASM participants and their EHR vendors to implement these new measures. We seek comments on our proposals on Promoting Interoperability measures. We also seek comments on alternatives to reporting the full set of Promoting Interoperability performance category measures. We also seek comment on the alternative considered to adopt the PI category in MIPS in its entirety, in addition to the applicable scoring methods, for each applicable ASM performance year, including any ongoing updates to the MIPS PI category over the course of the model. (e) Promoting Interoperability ASM Performance Category Scoring We propose at Sec. 512.740(c)(1) an ASM participant earns a score for each measure by fulfilling the reporting requirements specified at Sec. 512.740(b) and if an exclusion, under the measure's specifications as maintained and published by MIPS, is reported for a measure, the points available for that measure are redistributed to another measure. We propose at Sec. 512.740(c)(1)(i) maintaining the score amounts and applicable redistribution scoring policies for each required measure as set forth in the MIPS measure specifications. We refer readers to Table 41 for the scores assigned to each measure as defined in the MIPS measure specifications. We considered the alternative of developing an ASM-specific scoring system that assigns different scores to each Promoting Interoperability measure. However, we were concerned this would deviate from MIPS, which is likely already familiar to ASM participants. Furthermore, the existing scoring in MIPS already reflects ASM's priorities, for example, with more measure achievement points assigned to the Health Information Exchange category compared to the others. As stated earlier and consistent with MIPS, the optional Public Health and Clinical Data Exchange measures (Public Health Registry Reporting, Clinical Data Registry Reporting, or Syndromic Surveillance Reporting) in ASM would remain optional in ASM. Furthermore, we are not adopting the MIPS scoring policy of assigning 5 bonus points for submitting a ``yes'' response for any of the optional Public Health and Clinical Data Exchange measures given they may be less relevant to the care provided to Medicare beneficiaries by ASM participant, for example, engaging with a public health agency to submit syndromic surveillance data from an urgent care setting. In addition, bonus points may signal greater importance of these measures over other Promoting Interoperability measures that more directly support ASM's goals, such as interoperability to support primary and specialty care integration. We continue to capture essential public health reporting activities on immunizations and reportable conditions in the two required Public Health and Clinical Data Exchange Promoting Interoperability measures. We propose at Sec. 512.740(c)(2) that unless otherwise specified by CMS, provided an ASM participant meets the CEHRT requirements as described in section III.C.2.d.(5).(b), CMS sums the scores for each of the required Promoting Interoperability measures described at Sec. 512.740(b) and divides this sum by the total number of available Promoting Interoperability points to determine the ASM Promoting Interoperability performance category score. The ASM Promoting Interoperability performance category score cannot exceed 100 percent. If an ASM participant does not demonstrate meaningful CEHRT use as described in section III.C.2.d.5.(b) they would receive a zero for their Promoting Interoperability ASM performance category score. The Promoting Interoperability ASM performance category score would be used as a Promoting Interoperability performance category scoring adjustment to the final score specified under Sec. 512.745(a)(1)(iv). We considered automatically applying a score of zero for an ASM participant's Promoting Interoperability performance score for any ASM participant who did not meet achieve full points on the Promoting Interoperability performance category, however, we recognize it is important to acknowledge and credit the achieved points on the individual measures. Therefore, we would leverage the Promoting Interoperability performance category score for the Promoting Interoperability performance category scoring adjustments to the ASM final score, as discussed in section III.C.2.e.(1). of this proposed rule. The concepts represented in the Promoting Interoperability requirements support ASM participants in improving value, by improving patient care while maintaining or lowering the cost of care. We are not proposing any exceptions for the Promoting Interoperability ASM performance category requirements. CMS has established automatic reweighting criteria of the Promoting Interoperability category in MIPS at Sec. 414.1380(c)(2)(i)(C)(9) for certain MIPS eligible clinicians, such as hospital-based clinicians and Ambulatory Surgical Center-based clinicians, and for clinicians in small practices as defined in Sec. 414.1305. The MIPS reweighting policy generally excludes the Promoting Interoperability performance category from the MIPS final score if the applicable clinician or group practice does not submit Promoting Interoperability data. Due to ASM's participant selection criteria (see section III.C.2.c.(3). of this proposed rule) many ASM participants, except for those in small practices with 15 or fewer clinicians, would not qualify for this automatic reweighting criterion if they were to be considered eligible clinicians under MIPS. For ASM participants in small practices or solo practitioner ASM participants, we are proposing to adjust final scores as described in section III.C.2.e.(4). of this proposed rule. We believe the potential confusion and complexity to develop and implement an exclusion policy for the Promoting Interoperability ASM performance category would outweigh any potential benefits it would have for a likely small number of participants. Lastly, we are proposing an Extreme and Uncontrollable Circumstances policy at Sec. 512.780 and discussed in section III.C.2.i. of this proposed rule, but we are not proposing to include a Promoting Interoperability-specific hardship application in ASM. Data analysis of 2023 data submitted by clinicians who participated in MIPS that would have met the ASM participant selection criteria showed that less than 1 percent of those clinicians submitted a Promoting Interoperability -specific hardship application. The operational lift and resources needed to develop and maintain a hardship application for ASM likely outweigh the potential benefit only a few practices may receive. We seek comments on these proposals and discussed alternatives to score the ASM Promoting Interoperability performance category. e. Proposed Final Score Methodology In this section, we propose a scoring methodology for assessing the total performance of each ASM participant (referred to as a ``final score'') that allows for accountability and alignment for performance within each ASM cohort. Specifically, we propose to define at Sec. 512.705 ``final score'' to [[Page 32598]] mean a composite assessment (using a scoring scale of zero to 100 points) for each ASM participant for an ASM performance year determined using the methodology for assessing the total performance of an ASM participant according to performance standards for applicable measures and activities for each ASM performance category as described in Sec. 512.745. The methodology discussed in this section would calculate a final score based on the quality and cost ASM performance categories scores for each ASM participant while considering negative scoring adjustments for the improvement activities and Promoting Interoperability ASM performance categories. Additional points would be added to the final score for ASM participants that address complex care and ASM participants that are part of small practices. Later in this section of the proposed rule, we propose specific data submission requirements for ASM participants to receive a final score. ASM participants that do not meet these minimum data submission requirements would receive a final score of zero, which would lead to the maximum negative payment adjustment applicable for the corresponding ASM payment year. We also propose that ASM participants who meet the data submission requirements to receive a final score but cannot be measured on quality or cost performance would not receive a final score and would therefore receive a neutral payment adjustment. Specifically, we propose at Sec. 512.745(a) to calculate a final score of zero to 100 points using the formula we propose in section III.C.2.e.(5). of this proposed rule and specified at Sec. 512.745(a)(5) for each ASM participant that meets the requirements to receive a final score as proposed in section III.C.2.e.(2) of this proposed rule and specified at Sec. 512.745(a)(2). We propose policies to determine scores for the ASM performance categories in sections III.C.2.d.(2). through III.C.2.d.(5). of this proposed rule. ASM performance category scores reflect the assessment of each ASM participant's performance on the applicable measures and activities for an ASM performance category for its applicable performance period based on the performance standards for those measures and activities. We would use the final score to determine an ASM payment adjustment factor for the ASM participant for the applicable ASM payment year as discussed in section III.C.2.f. of this proposed rule. (1) ASM Performance Category Weights and Scoring Adjustments To create a final score from zero to 100 based on the individual ASM performance category scores, we propose at Sec. 512.745(a)(1)(i) through (iv) to assign an ASM performance category weight of 50 percent to each of the quality and cost ASM performance categories and to apply adjustments to the final score based on scores in the improvement activities and Promoting Interoperability ASM performance categories. Accordingly, we propose that the improvement activities and Promoting Interoperability ASM performance categories would not have a performance category weight but would have separately applied scoring adjustments that are potentially applied to the final score. The proposed weights for the quality and cost ASM performance categories, as well as the improvement activities and Promoting Interoperability ASM performance category scoring adjustments are described in Table 42. [GRAPHIC] [TIFF OMITTED] TP16JY25.114 We are proposing to only add weights to the quality and cost ASM performance categories for the final score and to not add weights to the improvement activities and Promoting Interoperability ASM performance categories to broaden the distribution of final scores. Based on historical MIPS performance in the improvement activities and Promoting Interoperability performance categories, we believe ASM participants would be likely to achieve higher ASM performance category scores in these two performance categories. One of the stated goals of ASM is to increase two-sided risk and create payment adjustments of a higher magnitude for ASM participants to incentivize performance improvements. If final scores were clustered around a small range of performance scores, differentiating performance and operationalizing a wider range of payment adjustments could prove difficult. We are also proposing to weight the cost and quality ASM performance category scores at 50 percent each because those weights align with ASM's goal, as described in sections III.C.2.d.(2). and III.C.2.d.(3). of this proposed rule, of decreasing the cost of care for beneficiaries with ASM's targeted chronic conditions and improving quality care through a focused measure set relevant to ASM's clinical specialties and targeted chronic conditions. To drive cost and quality improvement as described in sections III.C.2.d.(2). and III.C.2.d.(3). of this proposed rule, we believe that weighting cost and quality ASM performance category scores at 50 percent creates the necessary incentives to lower chronic condition cost of care while improving quality metrics. We propose at Sec. Sec. 512.745(a)(1)(iii) and 512.745(a)(1)(iv) to introduce improvement activities and Promoting Interoperability scoring adjustments to the ASM participant's final score dependent on the performance in the improvement activities and Promoting Interoperability ASM performance categories. We propose at Sec. 512.745(a)(1)(iii)(A) that ASM participants that achieve a 100 percent score for the improvement activities ASM performance category would not receive an improvement activities ASM performance category scoring adjustment to their final scores. We propose at Sec. 512.745(a)(1)(iii)(B) that ASM participants that receive a 50 percent improvement activities ASM performance category score (that is, an ASM participant that attested to meeting the requirements of one of the two proposed required improvement [[Page 32599]] activities) would receive an improvement activities ASM performance category scoring adjustment of negative 10 points to the final score specified at Sec. 512.745(a). We propose at Sec. 512.745(a)(1)(iii)(C) that ASM participants that receive a zero percent improvement activities ASM performance category score would receive an improvement activities ASM performance category scoring adjustment of negative 20 points to the final score specified at Sec. 512.745(a). The maximum improvement activities ASM performance category scoring adjustment would be negative 20 points. To determine the Promoting Interoperability performance category scoring adjustment, we propose at Sec. 512.745(a)(1)(iv)(A) and (B) that we would multiply the Promoting Interoperability ASM performance category score by 100 then subtract that product from 100 and divide by the maximum negative Promoting Interoperability ASM performance category scoring adjustment of 10 points. The maximum Promoting Interoperability ASM performance category scoring adjustment would be negative 10 points. For example, if an ASM participant's Promoting Interoperability ASM performance category score was 73 percent, we would multiply 73 percent by 100, subtract 73 from 100 and divide the score by the maximum negative Promoting Interoperability ASM performance category scoring adjustment of 10, resulting in a negative Promoting Interoperability ASM performance category scoring adjustment of 2.7 points. We considered weighting all the ASM performance category scores to determine a final score instead of proposing the scoring adjustments for the improvement activities and Promoting Interoperability ASM performance category scores. Under this alternative, we considered the following ASM performance category weights to calculate the final score when there is no reweighting: (1) quality 30 percent; (2) cost 30 percent; (3) improvement activities 25 percent, and (4) Promoting Interoperability 15 percent. For similar reasons discussed earlier in this section of this proposed rule, we believe that increasing the weight on the improvement activities and decreasing the Promoting Interoperability ASM performance category weights relative to performance category weights in MVPs as defined at Sec. 414.1365(e)(1) would increase the incentive to achieve the desired aims of improved primary care and specialty care integration under ASM. We believe that the improvement activities would be important to meet ASM's goal of better integrating specialty and primary care clinicians as described in section III.C.2.d.(4). of this proposed rule. Ultimately, we believe that the proposed ASM performance category weights and scoring adjustments, as discussed earlier in this section of this proposed rule, would overcome the potential challenges in determining meaningful payment adjustments if final scores were clustered around a small range of performance scores. We also considered using the same ASM performance category weights used by the Quality Payment Program to score performance categories in MVPs as defined at Sec. 414.1365(e)(1) but without the potential for reweighting as defined at Sec. 414.1365(e)(2) (89 FR 98345). As defined at Sec. 414.1365(e)(1), MVPs use the following performance category weights to calculate the final score when there is no reweighting: (1) quality 30 percent; (2) cost 30 percent; (3) improvement activities 15 percent; and (4) Promoting Interoperability 25 percent. We believe that the improvement activities ASM performance category's goal of integrating specialty managed care with primary care specialists is central to ASM's larger goal. Therefore, a higher weight should be given to the improvement activities ASM performance category over the Promoting Interoperability ASM performance category. We believe weighting the quality and cost performance categories at 50 percent more accurately assigns points in support of ASM's goals. With regards to the negative scoring adjustments, the improvement activities ASM performance category's goal of integrating specialty managed care with primary care specialists is central to ASM's larger goal. Therefore, a higher number of potential negative scoring adjustment points should be given to ASM participants that do not meet requirements of the improvement activities ASM performance category over the Promoting Interoperability ASM performance category. We seek comments on our proposed ASM performance category weights and scoring adjustments as proposed at Sec. 512.745(a)(1) and the alternative ASM performance category weights we considered in this proposed rule. (2) Requirements To Receive a Final Score (a) Determining a Final Score When an ASM Participant Meets or Does Not Meet Minimum Data Submission Requirements We propose at Sec. 512.745(a)(2) that we would determine whether an ASM participant is eligible to receive a final score for the applicable ASM performance year depending on the data submitted by the ASM participant. We propose at Sec. 512.745(a)(2)(i) that ASM participants who meet the data submission requirement for the quality ASM performance category as proposed at Sec. 512.725(a)(1)(i) and receive quality and cost ASM performance category scores would receive a final score greater than zero but not exceeding 100 for the applicable ASM performance year. These ASM participants would receive a payment adjustment based on the methodology proposed in section III.C.2.f of this proposed rule. We propose at Sec. 512.745(a)(2)(ii) that ASM participants who do not meet the data submission requirement for the quality ASM performance category as proposed at Sec. 512.725(a)(1)(i) would receive a final score of zero for the applicable ASM performance year. As discussed in section III.C.2.f of this proposed rule, these ASM participants would be subject to the maximum negative payment adjustment for the applicable ASM payment year. We also note that an ASM participant's final score may also be affected if the ASM participant is affected by an eligible extreme and uncontrollable circumstance during an ASM performance year as discussed in section III.C.2.i of this proposed rule. We refer readers to section III.C.2.e.(2).(b) later in this section of this proposed rule for proposals related to final scores when ASM participants meet the quality ASM performance category data submission requirements but do not receive a quality or cost ASM performance category score. We also refer readers to Table 43 later in this section of this proposed rule for a summary of the proposed final score policies and their impact on payment adjustments. As we propose ASM to be a mandatory model, we believe that we must set a minimum data submission requirement for an ASM participant to meet or otherwise be subject to the maximum negative payment adjustment as discussed in section III.C.2.f of this proposed rule. We believe that our proposed minimum data submission requirement is reasonable because it requires that an ASM participant reports at least one non- administrative claims- [[Page 32600]] based quality measure that also meets the data completeness requirement. Ultimately, this requirement would mean that the ASM participant is held accountable on the quality ASM performance category. Since we do not require ASM participants to submit data for the cost ASM performance category because we directly calculate the EBCMs, this proposed minimum data submission requirement would allow us to hold ASM participants accountable for quality and cost performance except in the case the ASM participant does not meet the case minimums for the quality and cost ASM performance category measures as discussed later in section III.C.2.e.(2).(b) of this proposed rule. We seek comments on our proposed requirements at Sec. 512.745(a)(2)(i) to calculate a final score for ASM participants and our proposal at Sec. 512.745(a)(2)(ii) that an ASM participant who does not meet these requirements would receive a final score of zero for the applicable ASM performance year. (b) Not Determining a Final Score When an ASM Participant Cannot Be Scored on the Quality or Cost ASM Performance Category At Sec. 512.745(a)(2)(iii), we propose that ASM participants who meet the data submission requirement for the quality ASM performance category as proposed at Sec. 512.725(a)(1)(i) but do not receive a quality ASM performance category or a cost ASM performance category score would not receive a final score for the applicable ASM performance year. As discussed in section III.C.2.f.(4) of this proposed rule, these ASM participants would not receive payment adjustments in the corresponding ASM payment year. That is, only ASM participants who meet the requirements to receive a final score proposed earlier in this section of this proposed rule and receive a quality or cost ASM performance category score would receive a final score for the applicable ASM performance year. As proposed in section III.C.2.f.(4) of this proposed rule, ASM participants that receive a final score greater or equal to zero and not exceeding 100 would receive an ASM payment adjustment factor, defined in section III.C.2.f of this proposed rule, based on that final score for the applicable ASM payment year; otherwise, we propose that the ASM participant would not receive a final score and would receive no payment adjustments for the applicable ASM payment year. We also refer readers to section III.C.2.i of this proposed rule for how the proposed extreme and uncontrollable circumstance policy influences an ASM participant's final score if an ASM participant has been deemed to be affected by an eligible circumstance. We believe that it is appropriate to hold ASM participants accountable for quality and cost for the purpose of determining payment adjustments. We recognize that there may be instances where an ASM participant meets the minimum data submission requirements for the ASM performance category to receive a final score described earlier in this section of this proposed rule but does not meet the case minimums for any required quality measure as discussed in section III.C.2.d.(2).(h) of this proposed rule or does not meet the case minimum for the required EBCM as discussed in section III.C.2.d.(3).(g) of this proposed rule. An ASM participant who does not receive a final score would receive a no payment adjustment (that is, neutral payment adjustment), meaning that they would not receive an upward or downward payment adjustment to their Medicare Part B payments for covered professional services for the applicable payment year because of participation in ASM. We believe that not determining a final score for the ASM participant and not adjusting payments during the applicable ASM payment year ensures that the ASM participant would not be unfairly penalized. We also believe that this proposal avoids complex reweighing policies. Reweighting policies would potentially mean that each final score represents a different mix of measures from different ASM performance categories. For example, one ASM participant could have a final score comprised of a cost ASM performance category score with improvement activities and Promoting Interoperability ASM performance category scoring adjustments whereas another could have a final score comprised of quality and cost ASM performance category scores. We believe that ensuring that all ASM participants' final scores reflect quality and cost performance is the most appropriate for determining payment adjustments that incentivize the care improvement and transformation that we seek to achieve through ASM. We considered requiring that an ASM participant would only receive a final score if we could score them on all four proposed ASM performance categories as discussed in section III.C.2.d. of this proposed rule. We believed, however, that such a requirement would potentially be burdensome and not as well aligned with our intention to hold all ASM participants accountable for quality and cost performance at a minimum. Table 43 summarizes the proposed requirements to receive a final score and the resulting impact on payment adjustments discussed in this section and in section III.C.2.f of this proposed rule. [[Page 32601]] [GRAPHIC] [TIFF OMITTED] TP16JY25.115 We seek comments on our proposal at Sec. 512.745(a)(2)(iii) that ASM participants that we cannot score on the quality or cost ASM performance category would not receive a final score for an ASM performance year. We also seek comments on the alternative of requiring data submission for all four ASM performance categories that we considered. (3) Complex Patient Scoring Adjustment We propose at Sec. 512.745(a)(3) to apply a complex patient scoring adjustment to ASM participants' final scores for eligible ASM participants as described later in this section of this proposed rule. We propose to use two risk indicators, Hierarchical Condition Category (HCC) risk scores and the proportion of patients with dual eligible status, ``dual eligible proportion,'' to calculate the complex patient scoring adjustment to ASM participants' final scores. For the purposes of ASM, we propose at Sec. 512.705 that ``risk indicator'' refers to Hierarchical Condition Category (HCC) risk scores under the HCC risk adjustment model established by CMS under section 1853(a)(1) of the Act or the proportion of beneficiaries with dual eligible status used in calculating the complex patient scoring adjustment as defined at Sec. 512.745(a)(3). Social and medical risk factors, such as income and co-occurring chronic conditions, play a major role in health status and, accordingly, the types of services and procedures furnished to a beneficiary. Physicians may face unique challenges delivering care to those with more ``patient complexity,'' a term used to describe and account for a combination of factors that impact beneficiaries' health outcomes. In ASM, our aim is to shift the focus away from volume and towards direct accountability for the cost and quality of health care services delivered. At the same time, by introducing an assessment of performance among physicians with similar clinical profiles but who may have different caseloads of complex patients, we seek to ensure that the care furnished by ASM participants is assessed fairly to espouse predictability and sustainability. We believe that inclusion of a complex patient scoring adjustment in the determination of final scores would help to achieve these objectives. The Quality Payment Program calculates a complex patient bonus and adds it to the MIPS final score for qualifying MIPS eligible clinicians based on their caseload of complex patients using two well-established risk indicators within the Medicare program: HCC risk scores and dual- eligible proportion under Sec. 414.1380(c)(3). The CY 2018 Quality Payment Program final rule established a complex patient bonus to be added to the final score for the CY 2020 MIPS payment year (82 FR 53771 through 537756) as required by MACRA. The purpose of the policy was to address the impact patient complexity may have on MIPS scoring and mitigate discrepancies without masking performance. Subsequent rulemaking continued using the complex patient bonus and modified the formula based on several factors including stakeholder feedback, updated analysis, and implications from the HHS Assistant Secretary for Planning and Evaluation (ASPE) reports to Congress (86 FR 65510 through 65519). We considered, but are not proposing, adopting an approach in which quality performance is risk adjusted for complex patients. We believe that providers have substantial control over the health care encounter and the outcomes assessed after the encounter. Thus, we decided that adjustments made at the quality measure or quality ASM performance category level would undermine our core aim to promote direct accountability and high-quality outcomes for all beneficiaries. Further, ASPE's second report released in June 2020, Social Risk and Performance in Medicare's Value-Based Purchasing Programs, provides recommendations for addressing risk factors in Medicare's value-based payment programs, including discouraging risk adjustments on measures that assess the process and outcome of care given in the care setting.\232\ The report reasoned that adjusting quality measures may have a negative impact on transparency for consumers and may inadvertently lower the standard of care. Instead, the report suggests including additional payments or bonuses for practices with a greater share of dual eligible and high-risk [[Page 32602]] patients is more appropriate as it recognizes that providing excellent care for complex beneficiaries may require more physician services, resources, and capacity.\233\ --------------------------------------------------------------------------- \232\ https://aspe.hhs.gov/sites/default/files/private/pdf/263676/Social-Risk-in-Medicare%25E2%2580%2599s-VBP-2nd-Report-Executive-Summary.pdf. \233\ Johnston KJ, Joynt Maddox KE. The Role Of Social, Cognitive, and Functional Risk Factors In Medicare Spending For Dual And Nondual Enrollees. Health Aff (Millwood). 2019;38(4):569-576. doi:10.1377/hlthaff.2018.05032. https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05032. --------------------------------------------------------------------------- Since the goal of the complex patient scoring adjustment policy in ASM is: (1) to protect access to care for complex patients and provide them with excellent whole-person care; and (2) to avoid placing ASM participants who care for complex patients at a potential disadvantage, we believe applying this complex patient scoring adjustment to the final score to determine payment adjustments is appropriate because caring for complex patients can affect all aspects of a practice, not just success in specific ASM performance categories. However, we recognize the importance of holding providers accountable for overall results, regardless of social and medical risk, and would want ASM participants to know the contribution of the complex patient scoring adjustment, if applicable, to their final score. Therefore, an ASM performance report, as discussed later in this section of this proposed rule, would include an ASM participant's complex patient scoring adjustment, if applicable, in addition to their final scores to ensure transparency in final score calculations. We propose at Sec. 512.745(a)(3)(i) that ASM participants who have at least one risk indicator (HCC risk scores and dual proportion) that is equal to or greater than the reference median for the risk indicator, described later in this section, for an applicable ASM performance year would have the complex patient scoring adjustment added to their final score for a given ASM performance year. The complex patient scoring adjustment would only be provided if the ASM participant meets the requirements to receive a final score greater than zero proposed at Sec. 512.745(a)(2)(i) and discussed in section III.C.2.e.(2). of this proposed rule. We note that the proposed complex patient scoring adjustment calculation methodology is similar to MIPS' complex patient bonus. However, we propose limited methodological adjustments to better align the scoring adjustment with ASM's scoring approach. To determine whether an ASM participant would qualify for the complex patient scoring adjustment, we propose to calculate a reference median for each risk indicator (HCC risk score and dual proportion) for each ASM cohort and for each ASM performance year. We propose to calculate the reference median of the ASM cohort's HCC risk scores and dual proportions using applicable data from 1 calendar year prior to the start of the applicable ASM performance year. We would only use applicable data from ASM participants that meet the data submission requirements for the quality ASM performance category for the applicable ASM performance year as described at Sec. 512.725(a)(1)(i). For example, we would calculate the reference medians for the 2027 ASM performance year using data from the 2026 calendar year. We would then calculate each risk indicator (HCC risk score and dual proportion) for each ASM participant using data from the current ASM performance year (in this example, the 2027 ASM performance year). ASM participants who have at least one calculated risk indicator for the ASM performance year that is equal to or greater than the reference median risk indicator calculated for their applicable ASM cohort would be eligible to receive the complex patient scoring adjustment. ASM participants that do not have data available to calculate either risk indicator score for an applicable ASM performance year would not be eligible to have the complex patient scoring adjustment added to their final score. We also propose to determine the reference median of each risk indicator separately for each ASM cohort to align with our proposed approach to make separate performance comparisons within each of these participant cohorts. We considered determining the reference median for each risk indicator using data from data from the concurrent ASM performance year but were concerned that Medicare claims runout periods would not provide complete data to calculate these medians within an ASM performance year. This approach would mirror the method that MIPS uses in calculating the complex patient bonus under Sec. 414.1380(c)(3) with adaptations to align with the overall performance comparison approach of ASM. We also considered not requiring that an ASM participant have a median or higher value for at least one of the two risk indicators to qualify for the complex patient scoring adjustment. While this alternative would expand the number of ASM participants that would qualify for the complex patient scoring adjustment for an ASM performance, we believe targeting the complex patient scoring adjustments to ASM participants treating a higher caseload of highly complex patients would be more appropriate. We also considered using the mean, instead of the proposed median of the risk indicator as the cutoff point but believe it could decrease the percentage of ASM participants that would receive the complex patient scoring adjustment like what was observed by the Quality Payment Program in exploratory analyses for the MIPS complex patient bonus methodology (86 FR 65110). We propose at Sec. 512.745(a)(3)(ii)(C), like in MIPS, to determine a standardized score for each risk indicator based on the mean and standard deviation of the raw risk indicator score to provide a standardized measurement of the distance between each risk score and the mean: (raw risk indicator score-risk indicator mean)/risk indicator standard deviation. We propose to use the mean and standard deviation from 1 calendar year prior to the ASM performance year using applicable data from ASM participants identified for that ASM performance year. Standardization allows us to determine how far each risk indicator score is from the mean. For example, the mean and standard deviations for the 2027 ASM performance year would be determined based on data from CY 2026 for ASM participants identified for the 2027 ASM performance year, which is a similar methodology to our proposed methodology to calculate the risk indicator reference medians described earlier in this section of this proposed rule. We propose at Sec. 512.745(a)(3)(ii)(A) to calculate the social complex patient scoring adjustment component as follows: Medically complex patient scoring adjustment component = 1.5 + 4*associated HCC standardized score calculated with the average HCC risk score assigned to beneficiaries (under the HCC risk adjustment model established by CMS under section 1853(a)(1) of the Act) seen by an ASM participant; We propose at Sec. 512.745(a)(3)(ii)(B) to calculate the medical complex patient scoring adjustment component as follows: Social complex patient scoring adjustment component = 1.5 + 4* associated dual proportion standardized score. We propose Sec. 512.745(a)(3)(ii)(C) to add the components together to calculate one overall complex patient scoring adjustment. [[Page 32603]] We propose at Sec. 512.745(a)(3)(iii) that ASM participants with an HCC risk score or dual-eligible proportion above their respective medians, as calculated earlier in this section, would receive a complex patient scoring adjustment that cannot exceed 10 points and cannot be below zero points. We considered a complex scoring patient adjustment that could exceed 10 points and a complex scoring adjustment with a maximum point value less than 10 points but not below zero points. However, we believe that aligning the proposed complex patient scoring adjustment maximum point value with the MIPS complex patient bonus maximum point value would reduce confusion across ASM participant who would have previously participated in MIPS. We believe the proposed formula compensates for a potential difference in payment related to HCC risk scores and dual proportion since MIPS uses the same approach in calculating the MIPS complex patient bonus defined at Sec. 414.1380(c)(3) (86 FR 65510 through 65519). We believe this methodology and formula are strongly supported by data and analyses explained in the CY 2022 PFS proposed rule (86 FR 65510 through 65519). Furthermore, dual enrollees tend to have lower income, a greater prevalence of mental health conditions, somatic chronic conditions, and significantly higher annual costs of care than their nondual counterparts.\234\ Thus, we believe that a complex patient scoring adjustment based on HCC risk scores and dual proportions, as is done in MIPS, would not only reduce inappropriate penalties among ASM participants that disproportionately care for dual eligible, high-risk populations but would also reduce inappropriate payments for ASM participants that care for less complex populations. --------------------------------------------------------------------------- \234\ Johnston KJ, Joynt Maddox KE. The Role Of Social, Cognitive, and Functional Risk Factors In Medicare Spending For Dual And Nondual Enrollees. Health Aff (Millwood). 2019;38(4):569-576. doi:10.1377/hlthaff.2018.05032. https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05032. --------------------------------------------------------------------------- We seek comments on the proposed inclusion of the complex patient scoring adjustment in final scores and the proposed methodology for calculating the complex patient scoring adjustment. We also seek comments on our alternatives considered related to calculating the reference median based on data from the concurrent ASM performance year and using a reference mean instead of a reference median. We also seek comment on the alternative of not requiring ASM participants to have at least one risk indicator that is equal to or greater than the reference median to receive the complex patient scoring adjustment. (4) Small Practice Scoring Adjustment We propose at Sec. 512.745(a)(4) that an ASM participant would be eligible to receive a small practice scoring adjustment in the calculation of their final score. We propose at Sec. 512.705 to define a ``small practice'' as a practice consisting of 15 or fewer clinicians at the time we identify ASM participants for an ASM performance year as described at Sec. 512.710(g). We propose at Sec. 512.705 to define a ``solo practitioner'' as a practice consisting of 1 clinician at the time we identify ASM participants for an ASM performance year as described at Sec. 512.710(g). Our proposed definitions for small practice and solo practitioner align with MIPS' small practice definition at Sec. 414.1305. We propose at Sec. 512.745(a)(4)(i) to add 10 points to the final score of an ASM participant who: (1) is in a small practice as defined at Sec. 512.705; (2) is not a solo practitioner as defined at Sec. 512.705; and (3) and meets the requirement to receive a final score greater than zero as described at Sec. 512.745(a)(2)(i) for an applicable ASM performance year. We propose at Sec. 512.745(a)(4)(ii) to add 15 points to the final score of an ASM participant who is a solo practitioner as defined at Sec. 512.705 and meets the requirement to receive a final score greater than zero as described at Sec. 512.745(a)(2)(i) for an applicable ASM performance year. We believe that it is necessary to support ASM participants against the potential challenges that they face in participation in Innovation Center models and other CMS value-based payment programs, like the Quality Payment Program. Participants in MIPS have provided feedback that many small practices and solo practitioners face challenges in their ability to participate in MIPS, including the costs to implement and maintain CEHRT, staff and training costs, and limited staff capacity to manage the complexity of the program (89 FR 98452). MIPS has several policies that aim to support small and solo practices, including scoring and reweighting policies as defined at Sec. 414.1380. We considered adopting some of these policies for the purposes of ASM given our use of the MVPs as a framework for this model. However, our goal in designing a scoring policy for ASM was to increase incentives for participation and to reduce the complexity of reweighting policies based on the characteristics of an ASM participant or the context in which they practice. We analyzed historical MIPS final score performance among a pool of likely ASM participants for both heart failure and low back pain. We found that small practices, including solo practitioners, were more likely to receive lower final MIPS scores compared to MIPS eligible clinicians in larger practices (that is, TINs with more than 15 clinicians). We also found that solo practitioners were more likely to receive lower scores than MIPS eligible clinicians in small practices (that is, practices with 2 to 15 clinicians in this situation). For these reasons, we believe that ASM participants in small practices would likely score lower than their counterparts in larger practices under ASM, with solo practitioners potentially scoring lower than other small practices. While we would not want to inadvertently skew the distribution of ASM participant final scores, we believe that it would be appropriate to support ASM participants in small practices to receive a final score adjustment. We based the proposed magnitudes of the final scoring adjustments based on the distribution of MIPS final scores among likely ASM participants. We also considered small practice scoring adjustments that were lower and higher than the proposed 10 points for non-solo practitioner ASM participants in small practices and 15 points for solo practitioner ASM participants. However, we believe that the proposed magnitudes of the scoring adjustments would appropriately increase the applicable ASM participants' score and would be easily understood by ASM participants. We refer readers to section III.C.2.f.(4).(b). of this proposed rule for an alternative level of risk that we considered for ASM participants in small practices. We believe that using a flat adjustment on the final score would be a clear and transparent method to support ASM participants to increase their score relative to other ASM participants so as to avoid potentially creating a barrier for them to achieve a net positive payment adjustment (see section III.C.2.f in this proposed rule for further discussion on our proposed payment methodology). Since we are not proposing to reweight ASM performance categories in the calculation of final scores as discussed earlier in this section of this proposed rule to simplify the data submission requirements and scoring policies, we believe that a flat adjustment would be a simple but effective mechanism to support ASM participants in small practices. We considered but are not proposing a similar flat-point adjustment for ASM [[Page 32604]] participants in rural areas as defined at Sec. 512.705 (which aligns with the MIPS rural area definition at Sec. 414.1305). We, however, found in our analysis of historical MIPS performance data among likely ASM participants that there was not a systematic difference in the performance data between likely ASM participants in rural and non-rural areas. While MIPS reduces the reporting requirements for the improvement activities performance category for MIPS eligible clinicians in rural areas as defined at Sec. 414.1380(b)(3), the lack of a systematic difference in historical MIPS performance between likely ASM participants of rural and non-rural status led us to not propose a scoring adjustment for ASM participants in rural areas. Furthermore, we observed that a high proportion of likely ASM participants in small practices were in rural areas. Adding a rural scoring adjustment on top of the small practice scoring adjustments would potentially be duplicative and inappropriately skew the distribution of final scores. We seek comments on our proposal at Sec. 512.745 (a)(4)(i) to add 10 points to the final score of an ASM participant who is in a small practice, is not a solo practitioner, and meets the requirements to receive a final score greater than zero and not exceeding 100. We also seek comment on our proposal at Sec. 512.745 (a)(4)(ii) to add 15 points to the final score of an ASM participant who is a solo practitioner and meets the requirements to receive a final score greater than zero and not exceeding 100. Finally, we seek comments on the alternative we considered of applying a similar flat-point adjustment for ASM participants in rural areas. (5) Final Score Calculation We propose at Sec. 512.745(a)(5) the following formula to calculate the final score for each ASM participant that meets the minimum data submission requirements discussed in section III.C.2.e.(2).(a) of this proposed rule: Final score = [(quality ASM performance category score x quality ASM performance category weight) + (cost ASM performance category score x cost ASM performance category weight)] x 100 + improvement activities ASM performance category scoring adjustment + Promoting Interoperability ASM performance category scoring adjustment + Complex Patient scoring adjustment + Small Practice scoring adjustment. Note: The final score cannot be below zero points or exceed 100 points We believe that this proposed final score calculation appropriately utilizes the quality and cost ASM performance category scores as outlined in sections III.C.2.e of this proposed rule, weights the quality and cost ASM performance categories, and considers the inclusion of the negative improvement activities ASM performance category scoring adjustment, the negative Promoting Interoperability ASM performance category scoring adjustment, the positive complex patient payment adjustment, and positive small practice scoring adjustment. For example, under the proposed final score calculation and the proposed weights for the quality and cost performance category, if an ASM participant has a quality performance category score of 80 percentage points [(40 measure achievement points out of 50 available measure achievement points)], a cost performance category score of 75 percentage points [(7.5 achievement points out of 10 available achievement points)], a negative improvement activity performance category scoring adjustment of -10 from successfully attesting to one improvement activity, a negative Promoting Interoperability ASM performance category scoring adjustment of -2.7 ((100 potential maximum Promoting Interoperability ASM performance category points-73 Promoting Interoperability ASM performance category score)/-10), a complex patient scoring adjustment of 5.5, and a small practice scoring adjustment of 10 from being in a small practice, the final score would be as follows: Final Score = [0.80 x 50 percent) + (0.75 x 50 percent)] x 100 + (- 10) + (-2.7) + 5.5 + 10 = 80.3. The ASM participant under the example conditions described above would have 77.5 points from the quality and cost ASM performance categories ([(0.80 x 50 percent) + (0.75 x 50 percent)] x 100), before the scoring adjustments are applied, and a final ASM score of 80.3 points We seek comments on the proposed final score calculation formula. (6) ASM Performance Report We propose at Sec. 512.745(b) to release an ASM participant's final score for each ASM performance year through an ``ASM performance report,'' which we propose to define at Sec. 512.705 as the notification that CMS provides to the ASM participant for each ASM performance year, which contains the information specified at Sec. 512.745(b). We propose at Sec. 512.745(b)(1) through (7) that the ASM performance report would, at minimum, provide each ASM participant: (1) individual measure-level scores for each of the measures required under each ASM performance category; (2) ASM performance category-level scores; (3) complex patient scoring adjustment, as applicable; (4) small practice or solo practitioner scoring adjustment, as applicable; (5) final score, and (6) the applicable ASM payment adjustment factor and (7) ASM payment multiplier for the applicable ASM payment year as discussed in section III.C.2.f of this proposed rule. As proposed, the ASM performance reports would not contain any protected health information or personally identifiable information of beneficiaries. Accordingly, we would share the ASM performance reports with ASM participants as a matter of course without following the attestation and data sharing agreement process for CMS sharing of beneficiary- identifiable information proposed in section III.C.2.j. of this proposed rule. We believe that the proposed approach to releasing ASM participant data would be a transparent way to help the ASM participant understand their performance on each of the required measures, activities, attestations, how those individual scores roll up to an overall ASM performance category score, and then how each ASM performance category score rolls up into the final score. We believe that this ASM performance report would be complementary to the other proposed data sharing approaches discussed in section III.C.2.j. of this proposed rule. We seek comments on our proposal at Sec. 512.745(b) to provide ASM participants with an ASM performance report for each ASM performance year. We also seek comments on the proposed components of the ASM performance report. f. Proposed ASM Payment Approach (1) Payment Approach In this section, we discuss our proposed payment methodology to use an ASM participant's final score to determine net positive, neutral, or negative payment adjustments to an ASM participant's future Medicare Part B payments for an applicable ASM payment year. ASM would test whether payment adjustments to ASM participants' future Part B FFS payments would preserve or improve the quality of care for beneficiaries with ASM's targeted chronic conditions receiving service from ASM participants while reducing program expenditures. Determining payment adjustments based on an ASM participant's performance across the ASM performance categories relative to other specialists furnishing services [[Page 32605]] related to each of ASM's targeted chronic conditions would directly incentivize performance improvement through financial incentives. We believe the proposed individualized payment adjustments under ASM would be reflective of the range of performance of specialists caring for beneficiaries with ASM targeted chronic conditions. As discussed in section III.C.1. of this proposed rule, we believe that the risk of a potential negative payment adjustment coupled with the incentive of a potential positive payment adjustment would incentivize the quality improvement and reduced low-value care spending that we aim to achieve through ASM. This type of risk arrangement would reward high performance and encourage ASM participants to improve the quality of care that they furnish to Medicare beneficiaries with ASM's targeted chronic conditions. Further, we believe that this type of incentive payment approach aligns with existing value-based purchasing programs, such as the Quality Payment Program, in which ASM participants may have previously participated, and through which they may have received payment adjustment on future Medicare Part B payments based on their performance in MIPS. We believe our proposed payment methodology for an ASM participant to receive a positive, neutral, or negative payment adjustment based on their performance would be a strong incentive to promote performance improvement and achieve ASM's objectives. (2) Payment Methodology Overview We propose at Sec. 512.750 a payment methodology for ASM where we would distribute, based on performance and in the form of scaled payment adjustments, a portion of the Medicare Part B payments paid to ASM participants for covered professional services during an ASM performance year, which would result in net positive, neutral, or negative payment adjustments during an ASM payment year. Accordingly, we propose to define at Sec. 512.705 an ``ASM incentive pool'' that would be a fixed percentage of the total amount of Medicare Part B covered professional service claims paid to ASM participants with final scores within an ASM cohort during an ASM performance year that would be distributed in in the form of scaled payment adjustments during an ASM payment year. We would calculate an ASM incentive pool for each ASM cohort for each ASM payment year as described at Sec. 512.750(c)(1)(iii). The ASM incentive pool would be the total amount of funds that we would use to calculate scaled payment adjustments for an ASM payment year. We propose to separately calculate an ASM incentive pool for each ASM cohort. For example, we would calculate a separate ASM incentive pool for the ASM heart failure cohort and ASM low back pain cohort. As discussed later in this section of this proposed rule, we would not prospectively withhold a portion of Part B payments for covered professional services during an ASM performance year to create the ASM incentive pools but would instead create virtual incentive pools based on actual spending during the ASM performance year. We also propose to define at Sec. 512.705 an ``ASM payment adjustment factor'' as a percent value based on an ASM's participant's final score as described at Sec. 512.750(c)(1) that we use in calculating adjustments to the ASM participant's Medicare Part B payments for covered professional services during an ASM payment year. Based on their performance, an ASM participant could earn an ASM payment adjustment factor percentage that is less than, equal to, or more than the percentage of their Medicare Part B payments used to calculate the ASM incentive pool, leading to a net negative, neutral, or positive net payment adjustment. Similar to our proposal to calculate separate ASM incentive pools for each ASM cohort, we would determine ASM payment adjustment factors separately for each ASM cohort as described later in this section of this proposed rule. We also propose to define at Sec. 512.705 an ``ASM payment multiplier'' as the numerical value equal to 1 plus the ASM payment adjustment factor determined for the ASM participant for an applicable ASM payment year as described at Sec. 512.750(c). As proposed at Sec. 512.750(a), to adjust payments, the amount otherwise paid under Medicare Part B for covered professional services furnished by an ASM participant during an ASM payment year would be multiplied by the ASM participant's ASM payment multiplier unless that ASM participant receives no payment adjustment (that is, a neutral payment adjustment) as described at Sec. 512.750(d) because they do not receive a final score for the corresponding ASM performance year. We refer readers to Sec. 512.745(a)(2) and section III.C.2.e.(2). of this proposed rule for proposals related to final scores. We also refer readers to section III.C.2.f. of this proposed rule and Sec. 512.750(f) for further proposals on how payment adjustments are applied in the case the ASM participant bills during an ASM payment year under a different TIN than the TIN we used to identify them as an ASM participant for the corresponding ASM performance year. The proposed payment methodology is similar in design to existing incentive payment structures in CMS value-based programs, such as the Hospital Valued-Based Purchasing Program (Hospital VBP Program) \235\ and the Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP Program).\236\ --------------------------------------------------------------------------- \235\ https://www.cms.gov/medicare/quality/initiativeshospital-quality-initiative/hospital-value-based-purchasing. \236\ https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing. --------------------------------------------------------------------------- The Hospital VBP Program rewards acute care hospitals with incentive payments based on the quality of care they provide, rather than just the quantity of services they provide. The statutory requirements of the Hospital VBP Program are set forth in Section 1886(o) of the Social Security Act. The program uses selected measures that were first specified under the Hospital Inpatient Quality Reporting Program as established by section 1886(o)(2)(A) of the Act and defined at Sec. 412.164(a).\237\ A fixed percentage withhold of base operating Diagnosis-Related Group (DRG) payments for each discharge during an applicable fiscal year determines the amount of money that can be redistributed to participating hospitals through value-based incentive payments based on a participating hospital's total performance score. A hospital may earn back a value-based incentive payment percentage that is less than, equal to, or more than the applicable reduction for that program year (88 FR 59063 through 59108). --------------------------------------------------------------------------- \237\ https://www.cms.gov/medicare/quality/initiatives/hospital-quality-initiative/hospital-value-based-purchasing. --------------------------------------------------------------------------- Section 215 of the Protecting Access to Medicare Act of 2014 and subsequent additions of sections 1888(g) and (h) of the Act established the SNF VBP Program.\238\ Then, section 111 of the Consolidated Appropriations Act, 2021 amended section 1888(h) of the Act to allow the Secretary to apply up to 9 additional measures to the SNF VBP Program.\239\ The SNF VBP Program requires CMS to evaluate SNFs based on their performance on multiple measures, including improvement and achievement, provide quarterly performance reports to SNFs, and calculate incentive payments for SNFs based on their performance (88 FR [[Page 32606]] 53276 through 53304).\240\ To determine and fund the statutorily required incentive payments, CMS withholds 2 percent of SNFs' Medicare FFS Part A payments to fund the SNF VBP Program. CMS then redistributes 60 percent of this total withhold to SNFs as incentive payments, which CMS applies prospectively to all Medicare FFS Part A claims paid under the SNF Prospective Payment System (PPS) for the applicable program year (82 FR 36619 through 36621). --------------------------------------------------------------------------- \238\ 42 U.S.C. 1395yy(h). \239\ 42 U.S.C. 1395yy(h). \240\ https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing. --------------------------------------------------------------------------- Our proposed payment methodology differs from the Hospital VBP Program and the SNF VBP Program in that we are not proposing a prospective withhold of ASM participants' Medicare Part B payments during an ASM performance year. Instead, we are proposing to determine a virtual ASM incentive pool as a fixed percentage of ASM participants' Medicare Part B covered professional service payments during the ASM performance year. We would then distribute this virtual incentive pool through scaled payment adjustments on ASM participants' future Medicare Part B payments during an ASM payment year. The size of each ASM incentive pool and the distribution of final scores within each ASM cohort would together influence the possible magnitude of the scaled payment adjustments and the distribution of net negative, neutral, and positive payment adjustments. As discussed earlier and later in this section of this proposed rule, we propose to calculate ASM incentive pools, ASM payment adjustment factors, and ASM payment multipliers separately for each ASM cohort. The higher an ASM participant's final score, the greater the likelihood that they would receive a positive payment adjustment. Under this proposed methodology, the ASM participant's performance during an ASM performance year would not have an immediate financial impact but would result in a future net payment adjustment determined by the ASM participant's performance relative to other ASM participants. We believe that this proposed payment methodology would allow ASM to create net positive, neutral, and negative payment adjustments based on the annual distribution of final scores in each ASM cohort. We also recognize that MIPS, under the Quality Payment Program, uses a value-based purchasing approach but determines payment adjustments based on performance relative to a performance threshold. In accordance with section 1848(q)(6) of the Act and Sec. 414.1405(b), MIPS compares each MIPS eligible clinician's final score against the performance threshold established for that MIPS payment year and against the other MIPS eligible clinicians in a single comparison pool to determine whether each MIPS eligible clinician will receive a positive, negative, or neutral payment adjustment. As defined at Sec. 414.1405, scores equal to the defined performance threshold receive a neutral (zero percent) payment adjustment. Scores falling below one- quarter of the performance threshold receive a negative adjustment of minus 9 percent, while scores between one-quarter of the performance threshold and the performance threshold receive a negative payment adjustment less than zero percent and up to minus 9 percent based on a linear sliding scale. Scores above the performance threshold can receive positive payment adjustments greater than zero percent and up to positive 9 percent based on a linear sliding scale. Depending on the range of scores within a given MIPS performance period, a scaling factor (ranging from zero to 3 is applied to the positive adjustments to retain budget neutrality. We considered, but decided not to propose, a payment methodology that includes a performance threshold like MIPS uses to determine ASM payment adjustment factors. To determine a MIPS payment adjustment factor for each MIPS eligible clinician for a MIPS performance period, CMS compares the MIPS eligible clinician's final score for the given year to the performance threshold CMS established for that same year in accordance with Section 1848(q)(6)(D) of the Act. Section 1848(q)(6)(D)(i) of the Act requires that CMS compute the performance threshold such that it is the mean or median (as selected by the Secretary) of the final scores for all MIPS eligible clinicians with respect to a ``prior period'' specified by the Secretary. Section 1848(q)(6)(D)(i) of the Act also provides that the Secretary may reassess the selection of the mean or median every 3 years. For each CY performance period/MIPS payment year, CMS has finalized a performance threshold based on the mean final score of all MIPS eligible clinicians from a previous MIPS performance period, as set forth in Sec. 414.1405(b)(4) through (10). CMS establishes the performance threshold via rulemaking prior to the beginning of each MIPS performance period. Adopting a similar performance threshold and payment adjustment approach for ASM would introduce several operational complexities. First, given the proposed separate comparison of final scores and separate calculation of ASM payment adjustment factors and ASM payment multipliers for each ASM cohort, we would need to determine a performance threshold for each ASM cohort for each ASM performance year. Because ASM is a new Innovation Center model, we would need to set a prospective performance threshold for the first ASM performance year without historical data on final scores. This lack of historical data could present challenges in calibrating the performance threshold to actual performance within the first ASM performance year. Second, we believe that a payment methodology that leverages a prospective performance threshold would limit the magnitude of ASM's negative and positive payment adjustments and, ultimately, the model's incentives to improve performance compared to our proposal to scale the payment adjustments distributed to ASM participants to equal the amount of an ASM incentive pool. For example, if a larger proportion of participants score above the performance threshold relative to the proportion of participants who score below the performance threshold, then the positive payment adjustments for those participants scoring above the performance threshold may be smaller in magnitude due to there being fewer negative adjustments from participants scoring below the performance threshold that can be distributed in positive payment adjustments. We seek comment on our overall payment approach for ASM, which would include an ASM incentive pool that is distributed in the form of scaled payment adjustments to ASM participants' future Medicare Part B payments based on their performance. We also seek comments on the alternative approach we considered that would use a performance threshold similar to MIPS in our payment methodology. In the following sections, we propose and seek comments on our proposed policies to (1) compare performance across ASM participants within each ASM cohort and (2) calculate ASM payment adjustment factors and ASM payment multipliers, including how we propose to calculate the ASM incentive pools. (3) Comparison of ASM Participant Performance We propose at Sec. 512.750(b) to separately compare the final scores of ASM participants in each ASM cohort to determine the payment adjustments [[Page 32607]] for each ASM participant. We believe that the ASM participant eligibility criteria appropriately identify specialists that can be held accountable for cost, quality, and practice improvement for specific chronic conditions. Accordingly, we believe that separately comparing ASM participants' final scores for each of the ASM targeted chronic conditions would provide more meaningful performance comparisons. Since each ASM cohort would be compared on the same set of requirements reported at the same TIN/NPI level (that is, the level at which an ASM participant is identified), the proposed performance comparison approach would allow for better differentiation in performance upon which to determine the payment adjustments. Currently, under MIPS, performance measurement and the subsequent payment adjustment are based on a range of measures voluntarily reported by clinicians, each of whom receives a final score based on the submitted measures. A MIPS eligible clinician's performance is assessed against a pool of all clinicians, regardless of specialty type or the services they provide. In accordance with section 1848(q)(6) of the Act and Sec. 414.1405(b), CMS compares each MIPS eligible clinician's final score against the performance threshold established for that MIPS payment year and against one another in a single comparison pool to determine whether each MIPS eligible clinician will receive a positive, negative, or neutral payment adjustment. CMS calculates MIPS payment adjustment factors in accordance with regulations at Sec. 414.1405 (89 FR 61985). In ASM, we wish to test whether a more targeted approach where clinicians are evaluated: (1) on a set of relevant performance measures they are required to report; and (2) among clinicians furnishing similar sets of services, would produce final scores and subsequent payment adjustments that are more reflective of clinician performance. We believe our proposed approach to separately compare ASM heart failure participants against other ASM heart failure participants and ASM low back pain participants against other ASM low back pain participants supports and incentivizes accountable care by creating more meaningful payment adjustments that differentiate and reflect ASM participant performance related to the chronic condition for which we believe the ASM participant should be accountable. We considered not separating ASM participants in each ASM cohort when comparing final scores to determine ASM payment adjustment factors and ASM payment multipliers, and instead, comparing the final scores of all ASM participants together. This approach would potentially be administratively easier to operationalize and would align with the current practice of comparison under MIPS, including MVPs, as defined at Sec. 414.1405. It would also potentially lead to a more varied distribution of final scores that would translate into a more varied distribution of payment adjustment, which could be helpful in creating the desired payment incentives. However, we believe that comparing performance within each ASM cohort is more appropriate in meeting our aim to test whether like-to-like performance comparisons based on a clinically relevant measure set and the resulting payment incentives achieve ASM's objectives of increasing accountability for specialty care related to ASM targeted chronic conditions. We also believe that comparing performance using a continuous distribution of final scores would result in more meaningful incentives for ASM participants because payment adjustments would be determined on relative performance across ASM participants instead of relative to a prospectively determined performance threshold. This approach also more closely mirrors the general market for goods and services, which does not provide an upfront guarantee of a certain market share or profit margin based on a predetermined threshold of performance. Rather, ASM participants would compete to provide the highest quality, most efficient care to ASM beneficiaries, and the top performers would receive positive payment adjustments--in the same way that competitive markets reward top performers with profits. We seek comments on our proposal at Sec. 512.750(b) to determine ASM payment adjustment factors and ASM payment multipliers by comparing final scores separately among each ASM cohort. We also seek comment on the alternative we considered of comparing final scores of all ASM participants together, like the MIPS approach for comparing performance scores. (4) Calculation of ASM Payment Adjustment Factors and ASM Payment Multipliers In this section, we first provide an overview of the proposed process to calculate ASM payment adjustment factors and ASM payment multipliers. We then break down each part of the calculation process and discuss our proposals and alternatives considered. As part of this process, we discuss the calculation of the ASM incentive pool using the ``ASM risk level,'' which we propose to define at Sec. 512.705 as the magnitude of the maximum positive or negative net payment adjustment percentage to which an ASM participant would be subject during an ASM payment year as described at Sec. 512.750(c)(1)(i), and the ``ASM redistribution percentage,'' which we propose to define at Sec. 512.705 as a percentage of Medicare Part B covered professional services payments to ASM participants during an ASM performance year that CMS distributes in the form of payment adjustments to ASM participants during an ASM payment year as described at Sec. 512.750(c)(1)(iii). We then discuss our proposals on how we would convert final scores into ASM payment adjustment factors and ASM payment multipliers based on the ASM incentive pool and our proposed ``exchange function,'' which we propose to define at Sec. 512.705 as the function used to translate an ASM participant's final score into an ASM payment adjustment factor as described at proposed Sec. 512.750(c)(1)(ii). We also propose to define at Sec. 512.705 a ``scaling factor'' as a numerical value calculated by CMS to ensure that the total estimated payment adjustments in an ASM payment year are equal to an ASM incentive pool for an applicable ASM payment year as described at Sec. 512.750(c)(1)(iv). Finally, we discuss how these ASM payment multipliers would be applied to future Medicare Part B claims for covered professional services during an ASM payment year. (a) Overview of ASM Payment Adjustment Factor and Payment Multiplier Calculation Process We propose at Sec. 512.750(c) to use the following process to calculate ASM payment adjustment factors and ASM payment multipliers for each ASM payment year for ASM participants with final scores for the corresponding ASM performance year. We refer readers to Table 43 in section III.C.2.e.(2). of this proposed rule for a summary of how an ASM participant's final score influences their payment adjustment. Calculation of ASM Incentive Pool Step 1. Calculate total Medicare Part B payments for covered professional services made to ASM participants with final scores in each ASM cohort during an ASM performance year. Step 2. Multiply the total calculated in Step 1 by the ASM risk level for each ASM payment year proposed at [[Page 32608]] Sec. 512.750(c)(1)(i) and discussed in section III.C.2.f.(4).(b).(i). of this proposed rule. Step 3. Multiply the amount calculated in Step 2 by the ASM redistribution percentage proposed at Sec. 512.750(c)(1)(iii) and discussed in section III.C.2.f.(4).(b).(ii) of this proposed rule to determine the total ASM incentive pool amount available for payment adjustment for each ASM cohort. Calculation of ASM Payment Adjustment Factor Step 4. Convert each ASM participant's final score into a transformed numerical final score by using the exchange function proposed at Sec. 512.750(c)(1)(ii) and described in section III.C.2.f.(4).(c). of this proposed rule. Step 5. Calculate a scaling factor as proposed at Sec. 512.750(c)(1)(iv) to ensure that the sum of applied ASM payment adjustment factors would equal the ASM incentive pool for each ASM cohort. The scaling factor is calculated by dividing the total amount in the ASM incentive pool (calculated in Step 3) by the sum of all ASM participant's transformed final scores (calculated in Step 4) multiplied by their respective total Medicare Part B covered professional services payments and the ASM risk level. Step 6A. For ASM participants that receive a final score greater than zero as described at Sec. 512.745(2)(i), calculate an ASM payment adjustment factor for each ASM participant within each ASM cohort by multiplying the ASM risk level, the ASM participant's transformed final score (calculated in Step 4), and the scaling factor (calculated in Step 5), and then subtracting the ASM risk level from this product as described at Sec. 512.750(c)(1)(i): ASM payment adjustment factor = (ASM risk level x transformed final score x scaling factor)-ASM risk level Step 6B. For ASM participants that receive a final score of zero as described at Sec. 512.745(2)(ii), calculate the ASM payment adjustment factor for each ASM participant equal to the negative of the applicable ASM risk level as described at Sec. 512.750(c)(1)(i). Calculation of ASM Payment Multiplier Step 7. Calculate the ASM payment multiplier for each ASM participant by using the following formula as described Sec. 512.750(c): ASM payment multiplier = 1 + ASM payment adjustment factor Under this proposed calculation process, an ASM payment adjustment factor could be negative (meaning net negative payment adjustments), zero (meaning neutral or no payment adjustments), or positive (meaning net positive payment adjustments). Accordingly, an ASM payment multiplier above 1 would result in net positive payment adjustments; an ASM payment multiplier of 1 would result in no (that is, neutral) payment adjustments, and an ASM payment multiplier less than 1 would result in a net negative payment adjustment. We propose at Sec. 512.750(d) that ASM participants that do not receive a final score as discussed in section III.C.2.e.(2).(b). of this proposed rule would receive an ASM payment adjustment factor of zero and an ASM payment multiplier of 1 (that is, a neutral payment adjustment) for the applicable ASM payment year. To illustrate how this process would work, we provide the following example of how we would calculate the ASM payment adjustment factor and ASM payment multiplier for individual ASM participants who received a final score greater than zero. In this example, we assume an ASM risk level of 9 percent and an ASM redistribution percentage of 85 percent. Step 1. We determine that all ASM participants with final scores in the example ASM cohort had a total of $1 billion in Medicare Part B covered professional service payments during the ASM performance year. Steps 2 and 3. We multiply the $1 billion calculated in Step 1 by the 9 percent ASM risk level and the 85 percent ASM redistribution percentage to determine an ASM incentive pool of $76.5 million for this example. Step 4. An ASM participant, in this example, received a final score of 80 points and the median score for the example ASM cohort was 50 points. When transformed under the exchange function, this final score would result in a transformed final score of 0.95. Step 5. We calculate a scaling factor of 1.5 applicable for all ASM participants in this example ASM cohort to ensure that the amount in the ASM incentive pool would be distributed in the form of scaled payment adjustments. The numerator of the scaling factor would be the $76.5 million in the ASM incentive pool (calculated in Steps 2 and 3) and the denominator would be calculated as $51 million based on the sum of all ASM participant's transformed final scores multiplied by their respective total Medicare Part B covered professional services payments and the 9 percent ASM risk level: ($76.5 million/$51 million = 1.5). Step 6A. The ASM payment adjustment factor, in this example, would be calculated as: [ASM risk level (9 percent) x transformed final score (0.95) x scaling factor (1.5)]-ASM risk level (9 percent) = 0.0385 Step 7. The resulting ASM payment multiplier, in this example, would be calculated as: 1 + ASM payment adjustment factor (0.0385) = 1.0385. The value of this ASM payment multiplier would mean that the example ASM participant would receive a positive adjustment of 3.85 percent on all Medicare Part B covered professional service payments during the corresponding ASM payment year. We note that the parameters of the previous calculation are fictitious and may look entirely different when calculating the ASM payment adjustment factors and ASM payment multipliers for the model, depending on the distribution of final scores, the magnitude of Medicare Part B covered professional service payments associated with ASM participants, the size of ASM incentive pool, among other factors. As discussed earlier in this section of this proposed rule, we are not proposing to use a performance threshold to determine a cutoff between positive and negative ASM payment adjustment factors and resulting ASM payment multipliers. We would, therefore, calculate ASM payment adjustment factors and resulting ASM payment multipliers based on the size of the ASM incentive pool and the distribution of final scores for a given ASM performance year using the proposed payment methodology described throughout this section of this proposed rule. Our proposed process to calculate ASM payment adjustment factors and adjust an ASM participant's Medicare Part B payments using an ASM payment multiplier during an applicable ASM payment year as proposed at Sec. 512.750 currently aligns with the processes and timelines by which the Quality Payment Program applies MIPS payment adjustments for each Medicare Part B claim made for covered professional services furnished by a MIPS eligible clinician as defined at Sec. 414.1405(e). We believe that aligning the timeline and processes with the Quality Payment Program's application of MIPS payment adjustments would ensure operational consistency and minimize confusion. As discussed in section III.C.2.e.(6). of this proposed rule, we propose to provide an ASM participant with their ASM payment adjustment factor and ASM payment multiplier in the ASM [[Page 32609]] performance report provided to each ASM participant for the applicable ASM performance year. We seek comment on our proposed process as described at Sec. 512.750(c) to calculate the ASM payment adjustment factors and ASM payment multipliers, and how we would apply ASM payment multipliers to an ASM participant's Medicare Part B payment during an ASM payment year. The following sections discuss our proposals and alternatives on how we propose to calculate an ASM incentive pool, including the proposed ASM risk level, ASM redistribution percentage, and our proposal for the exchange function. (b) ASM Incentive Pool As discussed earlier in this section of this proposed rule, we propose to calculate the ASM incentive pool for each ASM cohort based on two factors: (1) the ASM risk level as described at Sec. 512.705(c)(1) (that is, the magnitude of the maximum positive or negative net payment adjustment percentage to which an ASM participant would be subject during an ASM payment year) and (2) the ASM redistribution percentage as described at Sec. 512.750(c)(1)(iii) (that is, the percentage of Medicare Part B covered professional services payments to ASM participants during an ASM performance year that would be distributed in the form of payment adjustments to ASM participants during an ASM payment year). We discuss our proposals for the magnitude of ASM risk level and ASM redistribution percentage later in this section of this proposed rule. The total amount in an ASM incentive pool would directly determine the magnitude of ASM payment adjustment factors and resulting ASM payment multipliers that each ASM participant would receive during an ASM payment year. We describe the step-by-step process of calculating the ASM incentive pool earlier in this section of this proposed rule. In summary, we propose at Sec. 512.750(c)(1)(iii) to calculate an ASM incentive pool for each ASM cohort for applicable for each ASM payment year using the following formula: ASM Incentive Pool = ASM risk level x ASM redistribution percentage x [Sgr] ASM participant Medicare Part B payments The proposed approach to calculating an ASM incentive pool aligns with the current approach that other CMS VBP programs use when calculating the total amount that can be distributed to program participants through payment adjustments. Both the SNF VBP Program (82 FR 36619 through 36621) and the Hospital VBP Program (88 FR 59063 through 59108) employ a similar calculation to determine the total amount that can be redistributed through payment adjustments for their respective program participants. We believe the proposed approach would determine an ASM incentive pool amount that would be appropriate to distribute through scaled payment adjustments, and that the proposed approach would align with the desired level of two-sided risk that we believe would incentivize behavioral change and increased accountability. We seek comments on our proposed approach to calculate the ASM incentive pool for each ASM cohort. (i) ASM Risk Level As discussed earlier in this section of this proposed rule, we propose to use the annual ASM risk level to calculate the ASM incentive pool for each ASM cohort. We propose at Sec. 512.750(c)(1)(i) to establish the ASM risk level that is the magnitude of the maximum downside or upside risk to which an ASM participant would be subject to during an ASM payment year. We propose at Sec. 512.750(c)(1)(i)(A) through (E) the risk levels for each ASM payment year as summarized in Table 44. [GRAPHIC] [TIFF OMITTED] TP16JY25.116 Our proposed ASM risk level of 9 percent for the 2029 ASM payment year (based on 2027 ASM performance year performance) and the 2030 ASM payment year (based on 2028 ASM performance year performance) aligns with the CY2024 applicable percent of 9 percent under MIPS, which is the maximum and minimum range of potential MIPS payment adjustment factor for a given MIPS payment year defined at Sec. 414.1405(c) (88 FR 79378). Depending on the range of MIPS eligible clinicians' scores within a given MIPS performance period, a scaling factor (ranging from zero to 3) is applied to positive adjustments to retain budget neutrality as defined at Sec. 414.1405(b)(3) (88 FR 79378), meaning that the maximum positive payment adjustment factor may be below or above the applicable percent. A MIPS eligible clinician with a score of zero receives a payment adjustment factor equal to the negative of the applicable percent as defined at defined at Sec. 414.1405, meaning that all MIPS eligible clinicians are potentially subject to a maximum downside risk equivalent to the applicable percent. Based on our proposed ASM performance category and scoring approach that leverages the MVP measurement framework, we believe that starting and keeping the ASM risk level at 9 percent for the first two ASM payment years would be appropriate given its continued use within MIPS. We believe that gradually increasing the ASM risk level over time would provide an incentive for increased accountability that would be central to increasing accountability for longitudinal care management and improving the quality of care for beneficiaries with heart failure and low back pain. We considered annual ASM risk levels higher and lower than what we propose for each ASM performance year. Higher ASM risk levels would mean that ASM participants with lower final scores would be subject to potentially higher negative payment adjustments, whereas lower ASM risk levels would mean that ASM participants with lower final scores would be subject to potentially lower negative payment adjustments. Calibrating the right level of risk is critical to ensure that ASM participants [[Page 32610]] would receive meaningful incentives to improve performance. We believe that starting with a level of downside risk already familiar to many ASM participants who previously participated in MIPS would be appropriate given that the application of ASM payment adjustment factors would be applied to Medicare Part B claims for covered professional services (as discussed earlier in this section of this proposed rule) in a similar fashion as MIPS as defined at Sec. 414.1405(e). While we propose at Sec. 512.745(a)(4) a small practice scoring adjustment in an ASM participant's final score, we also considered whether to reduce the ASM risk level for ASM participants in small practices. Given the systematic differences in historical MIPS performance of likely ASM participants in small practices that we observed and discuss in section III.C.2.e.(4). of this proposed rule, reducing the ASM risk level for ASM participants in small practices would be one way to prevent them from being unfairly penalized in their payment adjustments. We were, however, concerned that decreasing the ASM risk level for ASM participants in small practices to be lower than the equivalent applicable percent in MIPS as defined at Sec. 414.1405(c) would be a disincentive for ASM participants in small practices to submit the required data under ASM and would potentially limit the magnitude of any net positive payment adjustments. We, therefore, believe that the proposed small practice scoring adjustment is a simpler and more transparent adjustment for ASM participants in small practices. We also considered a similar adjustment in ASM risk level for ASM participants in a rural location as an alternative to the rural practice scoring adjustment that we considered in section III.C.2.e.(4). of this proposed rule. For the same reasons discussed in section III.C.2.e.(4). of this proposed rule, we decided not to propose a scoring adjustment for ASM participants in rural areas. We seek comments on our proposed ASM risk level for each ASM payment year as part of our payment approach. We also seek comment on the alternative risk levels we considered for each ASM payment year. Finally, we seek comment on the alternatives we considered related to a lower ASM risk level for ASM participants in small practices and in rural areas. (ii) ASM Redistribution Percentage As discussed earlier in this section of this proposed rule, we propose to set an ASM redistribution percentage that is the percentage of the Medicare Part B covered professional service payments to ASM participants during an ASM performance year multiplied by the applicable ASM risk level that would be distributed in the form of scaled payment adjustments to ASM participants during an ASM payment year. As discussed earlier, we propose to define this total amount available for distribution as the ASM incentive pool. We propose at Sec. 512.750(c)(1)(iii) an ASM redistribution percentage of 85 percent beginning with the 2029 ASM payment year. Under this proposed ASM redistribution percentage, 85 percent of the Medicare Part B covered professional service payments to ASM participants during an ASM performance year multiplied by the applicable ASM risk level (that is, the value of the ASM incentive pool) would be distributed to ASM participants in the form of scaled payment adjustments. The other 15 percent of the Medicare Part B payments multiplied by the ASM risk level would be retained in the Medicare Trust Fund. To illustrate the scale of the net payment adjustments under these proposed policies, the proposed ASM redistribution percentage of 85 percent and an ASM risk level of 9 percent would lead to an estimated net 7.65 percent (that is, 85 percent multiplied by 9 percent) of the Medicare Part B covered professional service payments distributed in the form of payment adjustments to ASM participants and an estimated 1.35 percent (that is, 15 percent multiplied by 9 percent) retained by Medicare We refer readers to the regulatory impact analysis in section VII of this proposed rule for further discussion on the estimated impacts of these payment adjustments. As with our proposed exchange function discussed later in this section of this proposed rule, we view the important factors when specifying a ASM redistribution percentage to be--(1) the number of ASM participants that receive a positive payment adjustment; (2) the marginal incentives for all ASM participants to make broad-based care quality improvements and reduce low-value care,; and (3) the ability for ASM to demonstrate savings over the ASM test period. We intend for the proposed ASM redistribution percentage to appropriately balance these factors. We analyzed the distribution of ASM payment adjustment factors using simulated final scores data, focusing on the full range of available ASM payment adjustment factors using a sample of likely ASM participants. We found that an 85 percent ASM redistribution percentage would achieve an appropriate distribution of the number of ASM participants that would receive positive and negative payment adjustments under the different exchange functions that we considered, as discussed later in this section of this proposed rule. We also found that an 85 percent ASM redistribution percentage under the proposed exchange function would achieve the desired magnitude of positive and negative ASM payment adjustment factors under the ASM risk level proposed for the 2027 ASM performance year. We considered ASM redistribution percentages as high as 100 percent and as low as 60 percent. An ASM redistribution percentage of 100 percent would mean that the entirety of Medicare Part B covered professional service payments multiplied by the applicable ASM risk level would be distributed through ASM payment adjustment factors to ASM participants. We believe that ensuring a particular level of net savings through an ASM redistribution percentage less than 100 percent would help guarantee a particular level of Medicare Part B savings that would contribute to the net savings in total cost of care from provider behavioral effects that we hypothesize would occur as part of ASM as described in section III.C.1.(b). of this proposed rule. We refer readers to the regulatory impact analysis in section VII. of this proposed rule for further discussion on the scale of ASM and its estimated financial impacts. We considered an ASM redistribution percentage as low as 60 percent because it would increase the potential for higher net savings on Medicare Part B payments and mirrors a similar rate used by SNF VBP Program (82 FR 36619 through 36621). In analyses, however, we found decreasing the ASM redistribution percentages below what we are proposing (for example, to 60 percent or 75 percent) would result in an unfavorable distribution of negative and positive ASM payment adjustment factors that would not create the desired set of payment incentives to achieve ASM's goals. We seek comments on our proposed ASM redistribution percentage and alternatives considered. (c) Exchange Function An exchange function translates a participant's final score into a payment adjustment. The type of exchange function used can influence: (1) how many participants receive positive, neutral, or negative payment adjustments; and (2) the size, or magnitude, of the payment adjustment percentage that corresponds to a given [[Page 32611]] performance score. The choice of an exchange function ultimately contributes to creating an optimal set of incentives by setting the distribution and size of payment adjustments. We propose at Sec. 512.750(c)(1)(ii) to use a logistic exchange function to translate final scores into ASM payment adjustment factors that would distribute each ASM incentive pool to their respective ASM participants through ASM payment adjustment factors that result in net negative, neutral, or positive payment adjustments. In our view, important factors when adopting an exchange function include: (1) the percentage of ASM participants that would receive positive payment adjustments compared to those that would receive negative payment adjustments and (2) the magnitude of the maximum positive and negative net payment adjustment. We believe that ASM would be most effective at encouraging ASM participants to improve the quality of care that they provide to Medicare beneficiaries if ASM participants can earn positive adjustments through high performance across ASM's performance categories but also face some level of downside risk through possible negative payment adjustments. We also believe that the magnitude of negative and positive adjustments must create a strong incentive for improving care related to ASM's targeted chronic conditions. The choice of an exchange function, and the specific parameters of the chosen exchange function, can create different distributions of ASM payment adjustment factors, ASM payment multipliers, and net payment adjustments based on the final scores of ASM participants in each ASM cohort. In the Quality Payment Program, CMS uses a linear exchange function to translate MIPS eligible clinicians' final scores into MIPS payment adjustment factors relative to an annually determined performance threshold so that the program is budget neutral (89 FR 62199). Under the Hospital VBP Program, CMS uses a linear exchange function to translate a hospital's Total Performance Score into the percentage multiplier to be applied to each Medicare discharge claim submitted by the hospital during the applicable FY (76 FR 26531 through 26534). We refer readers to the Hospital VBP Program Final Rule (76 FR 26531 through 26534) for detailed discussion of the Hospital VBP Program's exchange function, as well as responses to public comments on this issue. Under the SNF VBP Program, CMS uses a logistic function to translate a SNF's performance score into an incentive payment multiplier (82 FR 36616 through 36619). The SNF VBP Program also considered a cube exchange function during its notice-and-comment rulemaking related to the SNF VBP Program exchange function (82 FR 36616 through 36619). We refer readers to the SNF VBP Program final rule (82 FR 36616 through 36619) for detailed discussion on the SNF VBP Program's exchange function and responses to public comments on this issue. Using the exchange functions that other Medicare VBP programs use or considered using while determining their payment methodology, we considered three exchange functions for use in ASM's payment methodology: (1) linear, (2) logistic, and (3) cube. The equations and graphs of the proposed exchange functions displayed in the remainder of this section of this proposed rule are illustrative. We note that the actual exchange functions' forms and slopes would vary depending on the distributions of final scores and wish to emphasize that we present these representations solely for the reader's clarity as we discuss our exchange function policy. The linear function is a simple, steadily increasing function ranging from zero to one hundred (Figure 2). A linear exchange function would provide ASM participants the same marginal incentive to continually improve performance of their final score. The linear exchange function we considered had the following formula, where xi is an ASM participant's final score: [GRAPHIC] [TIFF OMITTED] TP16JY25.117 [[Page 32612]] The logistic function is an S-shaped curve ranging between zero and one hundred with an inflection point at a specified midpoint (Figure 3). The S-shaped curve would mean that participants with scores within the bottom end of the distribution would receive similar payment adjustments and participants at the top end of the distribution would receive similar payment adjustments to one another. There would be more variation in the resulting payment adjustments for those participants with final scores in the middle of the distribution. The logistic exchange function we considered had the following formula, where xi is an ASM participant's final score, x0 represents the function's midpoint: [GRAPHIC] [TIFF OMITTED] TP16JY25.118 For the logistic exchange function, we considered values of the function's midpoint (that is, x0 in the earlier formula) set at: (1) 50, which represents the midpoint between the zero to 100 point range that an ASM participant could achieve in their final score; (2) the annual median final score in the ASM performance year for each ASM cohort, and (3) the annual mean final score in the ASM performance year for each ASM cohort. The functional form of the logistic function when centered at 50 points would mean that those ASM participants with final scores within the top 25 percent and the bottom 25 percent of final scores would receive relatively similar ASM payment adjustment factors. However, setting the midpoint at the median or mean final score could help to achieve a more balanced distribution between ASM payment adjustment factors that result in net positive or net negative payment adjustments. The cube function exponentially increases between zero and one hundred (Figure 4). The cube functions means that the incentive to improve performance increases more dramatically at the top end of the score distribution, meaning that a one-point difference in final score at the top end would result in a bigger difference in payment adjustment than the same one-point difference at the lower end of the final score distribution. The cube exchange function we considered had the following formula, where xi is an ASM participant's final score: [[Page 32613]] [GRAPHIC] [TIFF OMITTED] TP16JY25.119 We analyzed these three exchange functions using simulated final score data. For the logistic exchange function, we used a midpoint of the median final score within each ASM cohort (see discussion on the logistic function's midpoint earlier in this section of this proposed rule). We simulated final scores by simulating each of the four ASM performance category scores using informed distributions for measures and the proposed scoring policies for each ASM performance category (see the regulatory impact analysis in section VII of this proposed rule for further information on our simulation methods). Our modeling ensures that the estimated ASM payment adjustment factors and ASM payment multipliers for each ASM cohort resulted in net payment adjustments that equaled the total ASM incentive pool for the applicable ASM cohort. We evaluated the distribution of ASM payment adjustments factors that resulted from each function (that is, the number and proportion of each ASM cohort that received net negative and positive payment adjustments). We also evaluated descriptive statistics (for example, mean, median, minimum, maximum) of the resulting ASM payment adjustment factors and ASM payment multipliers from each function. We also considered the distribution of ASM payment adjustment factors and ASM payment multipliers by specific ASM participant characteristics, such as small practices. In our analysis, we found that linear and logistic exchange functions produced relatively similar distributions of ASM participants that would receive net positive payment adjustments, whereas more ASM participants would receive net positive payment adjustments under the cube function. Comparatively, the steadily increasing linear exchange function would mean that there would be a more even distribution of ASM payment adjustment factors across the distribution of final scores. Under the cube function, fewer ASM participants would receive net positive payment adjustments. We found that setting the logistic function midpoint at the median or mean final score for each ASM cohort produced a maximum ASM payment adjustment factor that exceeded the maximum ASM payment adjustment factor under the linear exchange function (we refer readers to the discussion of the logistic function's midpoint earlier in this section of this proposed rule). That is, adjusting the logistic function midpoint to a value around the mean or median final score of each ASM cohort would increase the maximum net positive payment adjustment while producing a more even distribution between net positive and negative payment adjustments. The cube function produced the highest maximum ASM payment adjustment factor. All the exchange functions had the same maximum negative ASM payment adjustment factor because the ASM risk level would determine the maximum net negative payment adjustment. When we compared the median ASM payment adjustment factor produced under each exchange function, we found that the logistic exchange function would produce the highest median net payment adjustment followed by the linear exchange function and then the cube exchange function. The cube exchange function would allow those ASM participants that achieve the highest final scores to achieve high ASM payment adjustment factors but would mean that ASM participants with final scores near the median final score would receive potentially lower ASM payment adjustment factors. Based on the results of this analysis, we believe that the logistic exchange function would be best suited to achieving the appropriate distribution of ASM payment adjustment factors at the appropriate level of magnitude. We recognize that using the same exchange function from other CMS programs would help stakeholders that use these programs' payment information across care settings better understand ASM's payment methodology. Both the Hospital VBP program and the Quality Payment [[Page 32614]] Program use some form of a linear exchange function in their payment methodologies. Three key program aspects that facilitate the use of a linear exchange function are a program's number of measures, measure weights, and correlation across program measures. These three aspects mean that there is less chance for a single required measure to skew scores into a non-normal distribution, meaning that it would be appropriate to use a linear exchange function for these programs (82 FR 36618). When first established, the SNF VBP Program relied on a single performance measure to determine performance scores. This approach meant that the distribution of performance scores could have been easily skewed, which could have resulted in an undesired distribution of incentive payments (82 FR 36618). The SNF VBP Program has since added up to 9 measures by which it can assess performance and has retained use of a logistic exchange function (88 FR 53276 through 53304). In our analysis, we found that simulated final scores among likely ASM participants could be skewed due to the potential directional correlation between measures across ASM's performance categories; for example, an ASM participant who performs well on one required quality measure may perform well across other quality measures. The potential for a skewed final score distribution and the use of a linear exchange function could result in an undesired distribution of ASM payment adjustment factors. For these reasons, we believe that the logistic exchange function would be more appropriate for the purposes of ASM's payment methodology. We seek comments on our proposal to use a logistic exchange function with midpoint set at the median final score for each ASM cohort to translate final scores into ASM payment adjustment factors. We also seek comments on the alternative exchange functions and specifications of each exchange function we considered. (d) Notification of ASM Payment Adjustment Factors and ASM Payment Adjustment Multipliers to ASM Participants As discussed in section III.C.2.e.(6) of this proposed rule, we propose at Sec. 512.750(e) to notify ASM participants of their ASM payment adjustment factor and ASM payment multiplier through the ASM performance report provided for each ASM performance year. As discussed earlier, we propose at Sec. 512.750(a) that the amount otherwise paid under Medicare Part B for covered professional services furnished by an ASM participant during an ASM payment year would be multiplied by the ASM payment multiplier determined based on an ASM participant's performance during an ASM performance year. As discussed earlier in this section of this proposed rule, our proposed process currently draws from the processes and timelines by which the Quality Payment Program applies MIPS payment adjustments for MIPS eligible clinician as defined at Sec. 414.1405(e). Aligning the timeline and processes with the Quality Payment Program application of MIPS payment adjustments would ensure operational consistency and minimize confusion for ASM participants that have previously participated in MIPS. Given the time separation between the ASM performance year and the ASM payment year, there may be situations when an ASM participant's TIN affiliation changes between the ASM performance year and the corresponding ASM payment year. We propose at Sec. 512.750(f) that ASM payment adjustment factors and ASM payment multipliers would continue to apply to Medicare Part B covered professional services payments to ASM participants during an ASM payment year with adjustments made depending on how TIN affiliations change after an ASM performance year and the end of the corresponding ASM payment year. In Table 45, we provide several illustrative scenarios and how our proposed policies discussed in this section of this proposed rule would affect the application of ASM payment multipliers in each scenario. During an ASM payment year, we propose at Sec. 512.750(f)(1) that Medicare Part B professional service claims submitted by an NPI who is an ASM participant with a final score for an ASM performance year but under a TIN (1) that did not identify the NPI as an ASM participant for the applicable ASM performance year and (2) to which the NPI began assigning billing rights after the ASM performance year but before the end of the payment year would be adjusted using the ASM payment multiplier calculated for the ASM participant for the corresponding ASM performance year. For example, if an ASM participant identified by TIN- A/NPI bills Medicare under their original practice (TIN A) during an ASM performance year but begins billing Medicare Part B covered professional services claims under a new practice (TIN B) after the ASM performance year but before the end of the corresponding ASM payment year, then we would apply the ASM participant's ASM payment multiplier to Medicare Part B claims submitted by the NPI under the new practice (TIN-B/NPI). If the same ASM participant (TIN-A/NPI) from the above example also billed under TIN A during the same ASM payment year, we would adjust their Medicare Part B payments for covered professional services using the applicable ASM payment multiplier calculated for the ASM participant. Our proposal means that we would not apply ASM payment multipliers to Medicare Part B claims submitted by TINs, other than the TIN identifying an ASM participant for an applicable ASM performance year and corresponding ASM payment year, to which the ASM participant assigned billing rights to before or during an ASM performance year. For example, if an ASM participant identified by TIN-A/NPI billed to TIN A and TIN B during the ASM performance year, then we would not apply the ASM payment multiplier to Medicare Part B claims submitted by the NPI under TIN-B during the corresponding ASM payment year. Our reasons for only applying ASM payment multipliers to Medicare Part B claims to TIN/NPIs combinations created after the end of the ASM performance year and before the end of the corresponding ASM payment year would be to prevent application of multiple payment adjustments on Medicare Part B claims, such as MIPS payment adjustments, during an ASM payment year. Building on the earlier example, in a given ASM performance year, an ASM participant (TIN-A/NPI) could be a MIPS eligible clinician under a different TIN/NPI combination (TIN-B/NPI) and receive a MIPS payment adjustment factor that would apply in the MIPS payment year that aligns with the corresponding ASM payment year. We would not want to interfere with the application of a MIPS payment adjustment factor to Medicare Part B claims billed under the TIN that identified the same NPI as a MIPS eligible clinician. If we identify an NPI as ASM participants under multiple TINs and that NPI begins billing Medicare Part B claims under a new TIN (that is, neither of the original TINs) after the ASM performance year but before the end of the corresponding ASM payment year, then we propose at Sec. 512.750(f)(2) to adjust Medicare Part B covered professional service payments submitted by the NPI under the new TIN using the highest of all ASM payment multipliers received for all TIN and NPI combinations that identified the NPI as multiple ASM participants for the corresponding ASM performance year. While we believe that there would [[Page 32615]] be few instances where a single NPI would be identified as multiple ASM participants, we believe this policy would appropriately track accountability to the NPI under a new TIN while reducing complexity by only applying on ASM payment adjustment multiplier. BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TP16JY25.120 BILLING CODE 4120-01-C Our proposals would closely link the ASM participants' performance during an ASM performance year to the ASM payment multiplier. It would also ensure that ASM participants that qualify for net positive payment adjustments keep them, even if they change TINs by the start of the ASM performance year. For those who have a net negative payment adjustment, this proposal would also ensure ASM participants would remain accountable for their performance. As discussed earlier in this section of this proposed rule, our proposals would also prevent interference with the application of MIPS payment adjustment factors if the NPI identifying the ASM participant was a MIPS eligible clinician under a different TIN/NPI combination during the same ASM performance year/MIPS performance period. We based our proposed approach on sub-regulatory guidance issued by the Quality Payment Program on how MIPS payment adjustment factors follow MIPS eligible clinicians if they change their TIN affiliation after a MIPS performance period (81 FR 77330, 85 FR 84917 through 84919, and 86 FR 65536).\241\ Like MIPS, our proposal for ASM tracks accountability to the ASM participant regardless of their specific TIN affiliation at the time we would apply ASM payment multipliers to an ASM participant's Medicare Part B covered professional services payments during an ASM payment year. --------------------------------------------------------------------------- \241\ https://qpp.cms.gov/resources/document/21ee9d76-a002-4f5d-b228-3a99b32aa7dc. --------------------------------------------------------------------------- We seek comments on our proposed approach to notify and apply ASM payment multipliers to Medicare Part B covered professional services payments during an ASM payment year. We also seek comment on how ASM payment multipliers would be applied to Medicare Part B covered professional services payments for ASM participants whose TIN affiliations change after an ASM performance year and before the end of a corresponding ASM payment year. g. Proposed Timely Error Notice Process We believe that it is necessary to have a process by which ASM participants may appeal the ASM performance report. However, the standard CMS claims appeals process submitted through a MAC would not lead to timely resolution of disputes for the purposes of ASM because MACs and other CMS officials would not have timely access to beneficiary attribution data. Therefore, we propose to waive the requirements of section 1869 of the Act specific to [[Page 32616]] claims appeals for purposes of testing ASM. The proposed ASM error notice process is specific to ASM and distinct from the standard CMS appeals procedures set forth under section 1869 of the Act. We note that ASM participants would still be subject to the same limitations on review as stipulated at Sec. 512.170. We propose at Sec. 512.755(a) to permit ASM participants to submit a timely error notice regarding the calculations contained within the ASM performance report if the ASM participant believes an error occurred in calculations due to data quality or other issues, or if the ASM participant believes an error occurred in calculations due to misapplication of methodology. We propose at Sec. 512.755(b) that if an ASM participant believes the ASM performance report contains a calculation error, then the ASM participant would be required to submit a timely error notice documenting the suspected calculation error within 30 calendar days of issuance of the ASM performance report. We also propose that CMS may specify different requirements for the form, manner, or deadline for submission of the error notice. If the ASM participant does not provide such timely error notice error in accordance with the timelines and processes specified by CMS, then we propose at Sec. 512.755(b)(1) that the ASM performance report would be deemed final and the ASM participant would be precluded from later contesting those elements of the ASM performance report for that performance year. Additionally, we propose that only an ASM participant may submit a written timely error notice according to the provisions at proposed Sec. 512.755(b)(2). The proposed 30-day window to review and appeal CMS calculations aligns with the length of time we have finalized for submitting appeals in other mandatory Innovation Center models, such as TEAM and the Increasing Organ Transplant Access (IOTA) Model. We acknowledge that the Quality Payment Program allows MIPS eligible clinicians to request a targeted review within 60 days of the closing of the data submission period. As explained in the 2016 Quality Payment Program Final Rule (81 FR 77353), section 1848(q)(13)(A) of the Act describes the required review process for MIPS as ``targeted'' and ``informal,'' and does not warrant a second level of review or appeals. Under MIPS, all decisions under the targeted review process are final. We considered an appeal window that conforms with MIPS, however, a 60-day timeframe would not be appropriate for ASM, as it would not provide sufficient time to generate final ASM payment adjustment factors and ASM payment multipliers before the applicable ASM payment year begins, given the process outlined in Sec. 512.190 of the Standard Provisions--which offers the ASM participant the opportunity to request two additional levels of appeal, including a final review by the CMS Administrator. If an ASM participant elects to go through all levels of appeal available to them, this would be a lengthy process that must conclude by December 1, when CMS must submit final payment adjustment factors to the MACs for the subsequent payment year. Therefore, because of the two additional levels of appeal, CMS is unable to offer ASM participants a lengthier period to review their initial calculations. We propose at Sec. 512.755(c) that if CMS receives a timely notice of a calculation error, we would issue an initial determination in writing within 30 calendar days to either confirm that there was an error in the calculation or verify that the calculation is correct. We note that CMS would reserve the right to an extension of the time for providing its initial determination upon written notice to the ASM participant. If an ASM participant disagrees with CMS' initial and wishes to dispute the results of the initial determination, under proposed Sec. 512.755(d), the ASM participant or CMS may request a reconsideration of the initial determination by following the reconsideration review process described in the standard provisions at Sec. 512.190. We solicit comment on our proposed timely error notice process for ASM appeals at Sec. 512.755 as well as alternatives considered. h. Proposed Waivers of Medicare Program Requirements (1) Background Under section 1115A(d)(1) of the Act, the Secretary may waive such requirements of Titles XI and XVIII and of sections 1902(a)(1), 1902(a)(13), 1903(m)(2)(A)(iii) of the Act, and certain provisions of section 1934 of the Act as may be necessary solely for purposes of carrying out section 1115A of the Act with respect to testing models described in section 1115A(b) of the Act. We propose to waive ASM participants from MIPS reporting and payment adjustments. We also propose to waive certain telehealth restrictions to encourage greater flexibility with the use of telehealth services by ASM participants. We seek comment on these proposed waivers. (2) MIPS Waiver We believe it may be necessary and appropriate to provide flexibilities to clinicians participating in ASM. We propose at Sec. 512.775 to use the Innovation Center's statutory authority under section 1115A(d)(1) of the Act to waive all ASM participants from participation in MIPS for any ASM performance year/ASM payment year in which they meet the ASM participant eligibility criteria, unless otherwise specified at proposed Sec. 512.710(a)(2). Our previous and current efforts in testing models where participants are judged against the performance of their peers, such as the SNF VBP Program and the HVBP Program, are likely to incentivize substantial improvements in cost savings and efficiency. We are building off existing mechanisms for payment adjustments of Medicare Part B claims found in MIPS. To maximize the effectiveness of these payment adjustments, we propose to waive ASM participants from participation in MIPS. This waiver would ease administrative burden, as ASM participants would be required to only report ASM performance category measures. The waiver would also prevent possible double-payment adjustments by ensuring ASM participants report their performance measures and receive payment adjustments through ASM alone. The MIPS waiver would only be available to ASM participants for the year(s) for which they are measured for performance under the model (that is, the ASM performance year). For example, if a clinician meets eligibility criteria for the model in CY 2027 and is measured for performance under the model for that year, the MIPS waiver applies to CY 2027 and the clinician is not required to participate in MIPS and be measured for performance under MIPS for that year. Yet, for any subsequent year that that clinician does not meet ASM eligibility criteria and is not measured for performance under the model, the MIPS waiver does not apply. The clinician must participate in MIPS and be measured for performance under MIPS if determined to be a MIPS eligible clinician for the applicable MIPS performance period. As described in section III.C.2.m of this proposed rule, we intend to promote as much longitudinal model overlap as possible and ensure maximum flexibility for ASM participants to join existing voluntary models, including Advanced APMs. Specialty care providers have been part of whole-person and primary care models, such as the Medicare Shared Savings Program, but the performance [[Page 32617]] measures in those programs are less relevant to specialty care. ASM takes the founding tenets for MVPs and goes further, allowing for like- to-like comparisons for all ASM participants by ensuring they are reporting on the same, clinically relevant measures. For these reasons, we propose to seek a MIPS waiver at Sec. 512.775(a) for all ASM participants regardless of whether they have achieved QP status through another Medicare model or program. We seek comment on the proposed MIPS waiver for all ASM participants at Sec. 512.775(a). (3) Telehealth (a) Background We expect that the proposed ASM design features would lead to greater interest on the part of ASM participants caring for ASM beneficiaries in furnishing services to beneficiaries in their home or place of residence. ASM would create new incentives for comprehensive care management for beneficiaries, including early identification and intervention regarding changes in health status. Under section 1834(m) of the Act, Medicare pays for telehealth services furnished by a physician or practitioner under certain conditions even though the physician or practitioner is not in the same location as the beneficiary. Under the longstanding statutory payment requirements, telehealth services must be furnished to a beneficiary located in one of the originating sites specified in section 1834(m)(4)(C)(ii) of the Act and the site must satisfy at least one of the geographic requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act. Generally, for Medicare payment to be made for telehealth services under the Medicare Physician Fee Schedule several conditions must be met, as set forth under Sec. 410.78(b). Specifically, the service must be on the Medicare list of telehealth services and meet all the following other requirements for payment: (1) the service must be furnished via an interactive telecommunications system, (2) the service must be furnished to an eligible telehealth individual, and (3) the individual receiving the services must be in an eligible originating site. For most telehealth services, this requires the beneficiary to be located at an originating site that is in certain, mostly rural, areas, and in a setting that is a health care facility. During the COVID-19 PHE, CMS used emergency authority under section 1135(b)(8) of the Act to waive these requirements to allow beneficiaries to be located in an originating site in any geographic area and in any setting, including the home of the beneficiary. Congress has enacted several laws that temporarily extend these flexibilities beyond the PHE. Most recently, the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119-4) amended section 1834(m)(4)(C)(iii) of the Act to extend these originating site flexibilities through September 30, 2025. Absent Congressional action, beginning October 1, 2025, the statutory limitations that were in place for Medicare telehealth services prior to the COVID-19 PHE will retake effect for most telehealth services. These include geographic and location restrictions on where the services are provided. When all these conditions are met, Medicare pays a facility fee to the originating site and provides separate payment to the distant site practitioner for the service. Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth services to include professional consultations, office visits, office psychiatry services, and any additional service specified by the Secretary, when furnished via a telecommunications system. For the list of approved Medicare telehealth services, see the CMS website at https://www.cms.gov/medicare/coverage/telehealth/list-services. Under section 1834(m)(4)(F)(ii) of the Act, we have an annual process to consider additions to and deletions from the list of telehealth services. Some literature suggests certain beneficial telehealth technologies, which enable health care providers to deliver care to patients in locations remote from providers, are being increasingly used to complement face-to-face patient-provider encounters to increase access to care, especially in rural or underserved areas.\242\ In these cases, the use of remote access technologies may improve the accessibility and timeliness of needed care, increase communication between providers and patients, enhance care coordination, and improve the efficiency of care. We note that certain covered professional services that are commonly furnished remotely using telecommunications technology are paid under the same conditions as in-person physicians' services and thus do not require a waiver to be considered as telehealth services. Such services that do not require the patient to be present in person with the practitioner when they are furnished are covered and paid in the same way as services delivered without the use of telecommunications technology when the practitioner is in person at the medical facility furnishing care to the patient. --------------------------------------------------------------------------- \242\ Azizi Z, Broadwin C, Islam S, et al. Digital Health Interventions for Heart Failure Management in Underserved Rural Areas of the United States: A Systematic Review of Randomized Trials. J Am Heart Assoc. 2024;13(2):e030956. doi:10.1161/ JAHA.123.030956. --------------------------------------------------------------------------- In other CMS episode-based payment models, such as TEAM and the Comprehensive Care for Joint Replacement Model (CJR) model, participants were permitted to use telehealth waivers that applied to two provisions: CMS waived the geographic site requirements under 1834(m)(4)(C)(i)(I) through (III) of the Act which allowed telehealth services to be furnished to eligible telehealth individuals when they are located at an originating site at the time the service is furnished via a telecommunications system but without regard to the site meeting one of the geographic site requirements. CMS waived the originating site requirements under section 1834(m)(4)(C)(ii)(I) through (VIII) of the Act which allowed the eligible telehealth individual to not be in an originating site when the otherwise eligible individual is receiving telehealth services in their home or place of residence. These telehealth waivers allowed providers and suppliers furnishing services to ASM beneficiaries to utilize telemedicine for beneficiaries that are not classified as rural and allowed the greatest degree of efficiency and communication between providers and suppliers and beneficiaries by allowing beneficiaries to receive telehealth services at their home or place of residence. We believe similar telehealth waivers would be essential to maximize the opportunity to improve the quality of care and efficiency for ASM. (b) Telehealth Waivers Specifically, like the telehealth waivers in TEAM and the CJR model, we propose at Sec. 512.775(b) to waive the geographic site requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act that limit telehealth payment to services furnished within specific types of geographic areas or in an entity participating in a federal telemedicine demonstration project approved as of December 31, 2000. Waiving of this requirement would allow beneficiaries located in any region to receive services related to the episode to be furnished via telehealth, as long as all other Medicare requirements for telehealth services are met. Any service on the list of Medicare approved telehealth services and reported on a claim that is not excluded from the proposed episode (see section III.C.2.c.(3).(b). of this [[Page 32618]] proposed rule) could be furnished to an ASM beneficiary, regardless of the beneficiary's geographic location. Under ASM, this waiver would support care coordination and increasing timely access to high quality care for all ASM beneficiaries, regardless of geography. Additionally, we propose waiving the originating site requirements of sections 1834(m)(4)(C)(ii)(I) through (VIII) of the Act that specify the particular sites at which the eligible telehealth individual must be located at the time the service is furnished via a telecommunications system. Specifically, we propose at Sec. 512.775(b)(2) to waive the requirement only when telehealth services are being furnished in the ASM beneficiary's home or place of residence during the episode. Any service on the list of Medicare approved telehealth services that is not excluded from the proposed episode definition (see section III.C.2.c.(3).(b). of this proposed rule) could be furnished to a ASM beneficiary in their home or place of residence, unless the service's HCPCS code descriptor precludes delivering the service in the home or place of residence. The existing set of codes used to report evaluation and management (E/M) visits are extensively categorized and defined by the setting of the service, and the codes describe the services furnished when both the patient and the practitioner are in that setting. Section 1834(m) of the Act provides for the conditions under which Medicare can make payment for office visits when a patient is located in a health care setting (the originating sites authorized by statute) and the eligible practitioner is located elsewhere. However, we do not believe that the kinds of E/M services furnished to patients outside of health care settings via real-time, interactive communication technology are accurately described by any existing E/M codes. This would include circumstances when the patient is located in his or her home and the location of the practitioner is unspecified. To create a mechanism to report E/M services accurately, TEAM and the CJR model used specific sets of HCPCS G-codes to describe the E/M services furnished to the model beneficiaries in their homes via telehealth. We considered whether establishing ASM-specific G-codes would serve a distinct purpose to the model. Upon review of existing G-codes for services provided via telehealth, we identified concerns with administrative burden and duplicative codes. Thus, we propose to allow ASM participants to bill established G-codes.\243\ --------------------------------------------------------------------------- \243\ https://www.cms.gov/medicare/coverage/telehealth/list-services. --------------------------------------------------------------------------- Under the proposed waiver of the geographic site requirement and originating site requirement, all telehealth services would be required to be furnished in accordance with all Medicare coverage and payment criteria, and no additional payment would be made to cover set-up costs, technology purchases, training and education, or other related costs. The facility fee paid by Medicare to an originating site for a telehealth service would be waived if there is no facility as an originating site (that is, the service was originated in the beneficiary's home). Finally, ASM participants furnishing a telehealth service to an ASM beneficiary in his or her home or place of residence would not be permitted to bill for telehealth services that were not fully furnished when an inability to provide the intended telehealth service is due to technical issues with telecommunications equipment required for that service. Beneficiaries would be able to receive services furnished under the telehealth waivers only during the episode. We plan to monitor patterns of utilization of telehealth services under ASM to monitor for overutilization or reductions in medically necessary care, and significant reductions in face-to-face visits with ASM participants. We seek comments on the proposed waivers with respect to telehealth services at Sec. 512.775(b). i. Proposed Extreme and Uncontrollable Circumstances (EUC) Policy Events may occur outside the purview and control of the ASM participant that may affect their performance in the model. We propose at Sec. 512.780 to apply a variation of the EUC policy for MIPS eligible clinicians (83 FR 60081), but with notable differences around scoring. Currently, MIPS has three mechanisms to adjust scoring MIPS performance categories due to external circumstances that may impact a MIPS eligible clinician's ability to report during a given performance year: (1) the MIPS automatic EUC policy; \244\ (2) the MIPS EUC Exception; and (3) the MIPS Promoting Interoperability Performance Category Hardship Exception.\245\ The latter two require affected MIPS eligible clinicians to submit an application to MIPS for consideration before being granted the exception. The MIPS Automatic EUC Policy, however, grants the exception to any MIPS eligible clinician located in a CMS-designated region affected by EUC, such as a Federal Emergency Management Agency (FEMA)-designated major disaster or an HHS-determined public health emergency. The exception eliminates the need for an application to request reweighting one or more MIPS performance categories. --------------------------------------------------------------------------- \244\ https://qpp.cms.gov/resources/document/3579730b-0891-4491-b880-eb21da631b15. \245\ https://qpp.cms.gov/mips/exception-applications. --------------------------------------------------------------------------- We propose to adopt at Sec. 512.780 a modified version of the MIPS Automatic EUC Policy. We would use the same triggering events from the MIPS Automatic EUC Policy, such as federal disaster and/or public health emergency declarations, as the basis for determining whether an ASM participant may be automatically exempted from submitting ASM performance category data for an ASM performance year during which they were impacted by the EUC. If the ASM participant's CBSA or metropolitan division that we use to determine ASM participant eligibility (as described at Sec. 512.710(e)(5)) is within an area identified by CMS, under Sec. 414.1380(c)(2)(i)(A)(8), as having been affected by extreme and uncontrollable circumstances,, then the ASM participant would be exempted from the requirement to submit ASM performance category data, as described at proposed Sec. 512.720. We propose at Sec. 512.780(c)(1) that ASM participants who qualify for the exemption and do not submit ASM performance category data that meet the requirements at Sec. 512.720 would not receive a final score and would receive an ASM payment adjustment factor that results in a neutral payment adjustment for the applicable ASM payment year. We propose at Sec. 512.780(c)(2) that ASM participants who qualify for the exemption but still submit ASM performance category data that meet the requirements at Sec. 512.720 would be scored according to the methodology described at proposed Sec. 512.745. We also considered using claims data to determine whether an ASM participant furnishes services in a Federal disaster area or in an area in which HHS has declared a public health emergency. However, we believe that using the same methodology to determine whether a clinician furnishes services in a mandatory geographic area as part of the ASM participant eligibility criteria would ensure consistency across geographic determinations used for EUC- related exemptions. Furthermore, we recognize the external impact of circumstances outside of the ASM participants' control, such as large-scale cyberattacks [[Page 32619]] and other emergencies outside of those identified in the previous paragraphs. We propose at Sec. 512.780(b)(1) and (2) to allow CMS to determine, based on information known to the agency prior to the beginning of the relevant ASM payment year, that data for an ASM participant are inaccurate, unusable, or otherwise compromised due to circumstances outside of the control of the clinician and its agents, including third-party intermediaries. We propose to notify ASM participants of CMS' decision on the existence of circumstances as proposed at Sec. 512.780(b)(1) and the impact of these circumstances upon scoring methodology for affected ASM participants. We also propose to grant CMS discretion in the form and manner of the notice to ASM participants. We considered adopting an application-based process for EUC exceptions like the MIPS provisions described at Sec. 414.1380(c)(6). However, we believe that any hardships outside of those contemplated at proposed Sec. 512.780(a) and (b) that renders an ASM participant unable to report on ASM performance categories for quality, improvement activities, or Promoting Interoperability, would likely result in the ASM participant being unable to bill claims for that ASM performance year as well. Accordingly, we believe that ASM participants in these circumstances would likely not meet the case minimums for quality and cost measures in their respective ASM performance categories (as proposed at Sec. Sec. 512.725(g) and 512.730(d)) and would, therefore, be subject to a neutral payment adjustment for the applicable ASM payment year. For example, if the ASM participant does not have 20 EBCM episodes identified in claims data for the impacted ASM performance year, then the ASM participant would not receive a final score and would be subject to an automatic neutral payment adjustment. However, in this scenario, since CMS is unable to determine whether the ASM participant meets the 20 EBCM episodes for the given ASM performance year until all claims for that ASM performance year have been completed, the ASM participant is encouraged to submit as much data as they are able to for all other ASM performance measures. We considered whether an ASM participant affected by the circumstances at proposed Sec. 512.780(a) or (b) who chooses to report ASM performance category data would be subject to a lower risk level as described at Sec. 512.745(a)(3). Applying a differential risk level for some ASM participants could skew the calculation of ASM payment adjustment factors for all ASM participants depending on how many ASM participants are impacted by the identified circumstances. Instead of adjusting the ASM participant's risk level, we believe it would be preferable for ASM participants not to receive a final score, which would result in an automatic neutral payment adjustment. We seek comments on the proposed provisions at Sec. 512.780, as well as the alternatives that we considered. j. Proposed Data Sharing Under this proposed model, we aim to incentivize ASM participants to engage in care redesign efforts to improve quality of care and reduce Medicare FFS spending for ASM beneficiaries. We expect ASM participants to work toward independently tracking their own data through electronic health records, health information exchanges, or other means that they believe are necessary to best evaluate the health needs of their patients, improve health outcomes, and produce efficiencies in the provision and use of health care items and services. However, we are proposing certain data sharing requirements in Sec. 512.760 to assist ASM participants in this process and in meeting the model objectives. We propose at Sec. 512.760(d) to provide certain aggregate data that has been de-identified in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule, 45 CFR 164.514(b), for the purposes of helping ASM participants understand their progress towards improving upon the model's performance metrics. Any aggregate data provided in advance of an ASM performance report for an ASM performance year would not be a guarantee of the ASM participant's final score or ASM payment adjustment factor. Additionally, as with other mandatory Innovation Center models such as TEAM and IOTA, we propose to provide certain beneficiary- identifiable data to ASM participants regarding the ASM beneficiaries under their care, upon request and execution of a data sharing agreement. We anticipate that ASM participants would use this data to assess their treatment patterns and overall care plans and to identify room for improvement under the model or conducting other ``health care operations'' under the HIPAA Privacy Rule, 45 CFR 165.501. Specifically, subject to the limitations discussed in this proposed rule, and in accordance with applicable law, including the HIPAA Privacy Rule (45 CFR part 160 and subparts A and E of part 164), we propose at Sec. 512.760(b) that CMS may offer an ASM participant an opportunity to request certain Medicare beneficiary-identifiable data. We propose that CMS would share this beneficiary identifiable data with ASM participants on the condition that the ASM participants and other individuals or entities performing functions or services related to the ASM participant's activities observe all relevant statutory and regulatory provisions regarding: (1) the appropriate use of data; and (2) the confidentiality and privacy of individually identifiable health information, and comply with the terms of the data sharing agreement proposed at Sec. 512.760(e). Moreover, we recognize that an individual clinician generally may not be a covered entity. However, the participant clinicians are likely part of a covered entity and therefore are subject to the HIPAA Rules. We propose at Sec. 512.760(f) that ASM participants must allow Medicare beneficiaries to request restrictions on sharing data, consistent with 45 CFR 164.522(a). We also propose at Sec. 512.760(b)(4) that, for the beneficiary-identifiable claims data, we would exclude information that is subject to the regulations governing the confidentiality of substance use disorder patient records (42 CFR part 2) from the data shared with an ASM participant. We request comment and feedback on our proposed policies at Sec. 512.760(a) to make certain beneficiary-identifiable data available to ASM participants upon execution of an ASM data sharing agreement. (1) Data Provided to ASM Participants (a) Legal Authority To Share Beneficiary-Identifiable Data and Applicability to Proposed ASM Data Sharing Processes We believe that an ASM participant may need access to certain Medicare beneficiary-identifiable data for the purposes of evaluating its performance, conducting quality assessment and improvement activities, conducting population-based activities relating to improving health or reducing health care costs, or conducting other health care operations listed in the first or second paragraph of the definition of ``health care operations'' under the HIPAA Privacy Rule, 45 CFR 164.501. We recognize there are sensitivities surrounding the disclosure of beneficiaries' individually identifiable health information, and that several laws place constraints on the sharing of individually identifiable health information. For example, section 1106 of the Act generally bars the disclosure [[Page 32620]] of information collected under the Act without consent unless a law (statute or regulation) permits the disclosure. Here, the HIPAA Privacy Rule would allow for the proposed disclosure of individually identifiable health information by CMS to ASM participants so they can carry out ``health care operations'' that fall within the first and second paragraphs of the definition of the term as defined at 45 CFR 164.501. In this proposed rule, we propose to make ASM participants accountable for quality and cost outcomes during an applicable ASM performance year. We believe it is necessary for the purposes of this model to offer ASM participants the ability to request certain raw beneficiary-identifiable Medicare claims data that CMS used to determine ASM participant eligibility for an applicable ASM performance year, as well as for the beneficiaries who trigger an EBCM episode with the ASM participant during the applicable ASM performance year. ASM participants would only receive data for the ASM beneficiaries who are their patients. We believe these data would constitute the minimum information necessary to enable ASM participants to understand care spending patterns, appropriately coordinate care, and target care strategies toward ASM beneficiaries. Under the HIPAA Privacy Rule, covered entities (defined in 45 CFR 160.103 as health plans, health care providers that conduct certain transactions electronically, and health care clearinghouses) may only use or disclose protected health information (PHI), a subset of individually identifiable health information I, as permitted or required by the HIPAA Privacy Rule, without the individual's authorization. The Medicare FFS program, a ``health plan'' function of the Department, is subject to the HIPAA Privacy Rule limitations on the use or disclosure of PHI without an individual's authorization. ASM participants are also covered entities, provided they are health care providers as defined by 45 CFR 160.103 and they electronically transmit any health information in connection with one or more HIPAA standard transactions, such as for claims, eligibility or enrollment transactions. ASM participants are clinicians who are either covered entities themselves, or they are part of a covered entity. We believe that the proposed disclosure of beneficiary-identifiable data under the ASM model would be permitted by the HIPAA Privacy Rule under the provisions that permit disclosures of PHI for ``health care operations'' purposes. Under those provisions, a covered entity is permitted to disclose PHI to another covered entity for the recipient's health care operation's purposes if both covered entities have or had a relationship with the subject of the PHI being requested, the PHI pertains to such relationship, and the PHI disclosure is for a ``health care operations'' purpose listed within the first two paragraphs of the definition of ``health care operations'' in the HIPAA Privacy Rule (45 CFR 164.506(c)(4)). The first paragraph of the definition of health care operations includes ``conducting quality assessment and improvement activities, including outcomes evaluation and development of clinical guidelines,'' and ``population-based activities relating to improving health or reducing health costs, protocol development, case management and care coordination.'' The second paragraph of the definition of health care operations includes ``evaluating practitioner and provider performance'' (45 CFR 164.501). We propose at Sec. 512.760 that, subject to having an ASM data sharing agreement in place, an ASM participant may request from CMS certain beneficiary-identifiable claims for ASM beneficiaries under their care. Under the ASM data sharing agreement, we propose at Sec. 512.760(b)(5)(i) and (ii) to allow CMS to share data with an ASM participant which includes unrefined (raw) Medicare Parts A, B, and D beneficiary-identifiable claims data used to determine ASM participant eligibility for an applicable ASM performance year, as well as unrefined (raw) Medicare Parts A, B, and D beneficiary-identifiable claims data for ASM beneficiaries who trigger an episode with the ASM participant during the applicable ASM performance year. ASM participants would use the data on their patients to evaluate the performance of the ASM participant and other providers and suppliers, such as clinicians with whom the ASM participant may have entered into a collaborative care arrangement, that furnished services to the patient, conducts quality assessment and improvement activities, and conducts population-based activities relating to improved health for their patients. When done by or on behalf of an ASM participant that is a covered entity, these data uses would qualify as ``health care operations'' under the first and second paragraphs of the definition of health care operations at 45 CFR 164.501. This encompasses the anticipated uses of the beneficiary-identifiable data by an ASM participant so that such uses would be permissible under the HIPAA Privacy Rule. Moreover, done by or on behalf of a covered entity, these are covered functions and activities that would qualify as ``health care operations'' under the first and second paragraphs of the definition of health care operations at 45 CFR 164.501, thus encompassing the anticipated uses of the beneficiary-identifiable data by an ASM participant and that such uses would be permissible under the HIPAA Privacy Rule. Moreover, our proposed disclosures would be made only to HIPAA covered entities that have (or had) a relationship with the subject of the information, the information we would disclose would pertain to such relationship, and those disclosures would be for purposes listed in the first two paragraphs of the definition of ``health care operations.'' When using or disclosing PHI, or when requesting this information from another covered entity, covered entities or business associates must make ``reasonable efforts to limit'' the PHI that is used, disclosed, or requested to the ``minimum necessary'' to accomplish the intended purpose of the use, disclosure, or request (45 CFR 164.502(b)). Thus, ASM participants must limit their beneficiary- identifiable data requests to the minimum necessary, as selected from the proposed data elements identified at Sec. 512.760(c), to accomplish the intended purpose of the use, disclosure, or request. The proposed minimum necessary data elements include, but are not limited to: Medicare beneficiary identifier (ID). Procedure code. Sex. Diagnosis code. Claim ID. The from and through dates of service. The provider or supplier ID. The claim payment type. Date of birth and death, if applicable. Tax identification number. National provider identifier. The Privacy Act of 1974 also places limits on agency data disclosures. The Privacy Act applies when Federal agencies maintain systems of records by which information about an individual is retrieved by use of one of the individual's personal identifiers (names, Social Security numbers, or any other codes or identifiers that are assigned to the individual). The Privacy Act generally prohibits disclosure of information from a system of records to any third party without the prior written consent of the individual to whom the records apply (5 U.S.C. 552a(b)). [[Page 32621]] ``Routine uses'' are an exception to this general principle. A routine use is a disclosure outside of the agency that is compatible with the purpose for which the data was collected. Routine uses are established by means of a publication in the Federal Register about the applicable system of records describing to whom the disclosure will be made and the purpose for the disclosure. For the proposed ASM model, we believe that the proposed data disclosures are compatible with the purposes for which the data discussed in this rule was collected, and, thus, would not run afoul of the Privacy Act, provided we ensure that an appropriate Privacy Act system of records ``routine use'' is in place prior to making any disclosures. The systems of records from which CMS would share data are the Medicare Integrated Data Repository (IDR), the Common Working File, Medicare Provider Enrollment, Chain, and Ownership System (PECOS), the Enrollment Database (EDB), and the Part D Event (PDE) File. We believe that the proposed data disclosures are compatible with the purposes for which the data discussed in the proposed rule were collected and may be disclosed in accordance with the routine uses applicable to those records. We propose at Sec. 512.760 that we would share the ASM beneficiary-identifiable lists and data with ASM participants who have submitted a formal request for the data. Under our proposal, the request must be submitted on at least an annual basis in a manner and form specified by CMS. The request also would need to identify the data being requested and include an attestation that (1) the ASM participant is requesting this beneficiary-identifiable data as a HIPAA covered entity, or as part of a HIPAA covered entity, and (2) the ASM participant's request reflects the minimum data necessary for the ASM participant to conduct activities that are described in the first or second paragraph of the definition of health care operations at 45 CFR 164.501. In addition, ASM participants who request this data must have a valid and signed ASM data sharing agreement in place, as described in more detail later in this section of this proposed rule. We propose at Sec. 512.760(b) that we would make available beneficiary-identifiable data for ASM participants to request for purposes of conducting activities described in the first or second paragraph of the definition of health care operations at 45 CFR 164.501 on behalf of their attributed patients who are Medicare beneficiaries. We believe that access to beneficiary-identifiable claims data would improve care coordination between ASM participants and other health care providers. We also propose at Sec. 512.760(b)(2)(ii) that ASM participants limit the request for beneficiary-identifiable claims data to Medicare beneficiaries who have been seen by ASM participants for an ASM targeted chronic condition, and who did not request to restrict sharing their claims data with the ASM participant, as proposed at Sec. 512.760(f)(1). Finally, we propose that CMS would share beneficiary identifiable data with an ASM participant on the condition that the ASM participant and other individuals or entities performing functions or services related to the ASM participant's activities, comply with all applicable laws governing the use of data and the privacy and security of individually identifiable health information and the terms of the ASM data sharing agreement proposed at Sec. 512.760(e)(1). (b) Medicare Beneficiary Opportunity To Request Restrictions on Data Sharing We propose at Sec. 512.760(f)(1) that ASM beneficiaries would be notified about the opportunity to request restrictions on sharing claims data with an ASM participant, in accordance with 45 CFR 164.522. Recognizing the administrative burden associated with such restrictions, however, we note that under 45 CFR 164.522(a)(1)(iii), covered entities are not required to agree to such a restriction unless the request fulfills the conditions set forth at 45 CFR 164.522(a)(1)(vi). Furthermore, we propose that Medicare beneficiaries may not decline to have the aggregate, de-identified data proposed in Sec. 512.760(d) shared with ASM participants. We also note that, in accordance with 42 U.S.C. 290dd-2 and its implementing regulations at 42 CFR part 2, we do not share beneficiary identifiable claims data relating to the diagnosis and treatment of substance use disorders under this model. We recognize this policy is distinct from the data sharing policy in IOTA and other voluntary Innovation Center models. We considered aligning the data sharing provisions with IOTA but decided to align with HIPAA requested data restriction provisions because they are less administratively burdensome on providers. We request comment and feedback on our proposed policies at Sec. 512.760(f) to enable ASM beneficiaries to request restrictions on data sharing with their treating ASM participant. We also request comment and feedback on whether ASM should align its data sharing policies with existing Innovation Center models or retain its existing proposed structure, which is based on HIPAA requirements at 45 CFR 164.522. (c) Aggregated Data Sharing We propose at Sec. 512.760(d) to deliver certain aggregate data that has been de-identified in accordance with the HIPAA Privacy Rule, 45 CFR 164.514(b), for the purposes of helping ASM participants understand their progress towards improving upon the model's performance metrics. Such aggregated, de-identified data could include, when available, claims-based cost, utilization, and quality data. Cost and utilization data could include fields such as average Medicare FFS (Part A and Part B) expenditure per beneficiary, the top diagnosis codes for beneficiaries the ASM participant is seeing, or hospital admission and readmission rates. Quality data could include preliminary measure rates for the claims-based measures in each ASM measure set. The data would support ASM participants in analyzing care provided to their Medicare patients and their efforts to monitor, understand, and manage utilization and expenditure patterns as well as to develop, target, and implement quality improvement programs and initiatives. We are considering providing these two forms of performance feedback at regular intervals, allowing insights into trends that could result in improved model performance and beneficiary care. We seek comments on the elements, cadence, and format of this claims-based performance aggregated data and how it could be most beneficial to ASM participants in improving quality and reducing costs. Any aggregate data provided in advance of an ASM performance report for an ASM performance year would not be a guarantee of the ASM participant's final score or ASM payment adjustment factor. Since this data would be de-identified according to the HIPAA Privacy Rule requirements and would not contain any protected health information (PHI) or personally identifiable information (PII), this aggregate data would be provided to ASM participants regardless of whether they have executed an ASM data sharing agreement with CMS. (2) ASM Data Sharing Agreement (a) General Requirement for Beneficiary-Identifiable Data We propose at Sec. 512.760(e)(1) that if an ASM participant wishes to retrieve ASM beneficiary-identifiable data, the ASM participant would be required to [[Page 32622]] complete, sign, and submit--and thereby agree to the terms of--an ASM data sharing agreement with CMS on at least an annual basis. We propose to define the ``ASM data sharing agreement'' as an agreement between the ASM participant and CMS that includes the terms and conditions for any beneficiary-identifiable data being shared with the ASM participant under proposed Sec. 512.760(e). We propose that under the ASM data sharing agreement, the ASM participant would be required to comply with the limitations on the use and disclosure of PHI imposed by the HIPAA Privacy Rule, the applicable ASM data sharing agreement, and the statutory and regulatory requirements of ASM. We also propose that the ASM data sharing agreement would include certain protections and limitations on the ASM participant's use and further disclosure of the beneficiary-identifiable data and would be provided in a form and manner specified by CMS. We propose at Sec. 512.760(g) that a designated data custodian would be the individual(s) that an ASM participant would identify as responsible for ensuring compliance with all privacy and security requirements, including all applicable laws and terms of the ASM data sharing agreement, and for notifying CMS of any incidents relating to unauthorized disclosures of beneficiary- identifiable data. We believe it is important for the ASM participant to first complete and submit a signed ASM data sharing agreement before it retrieves any beneficiary-identifiable data to help protect the privacy and security of any beneficiary-identifiable data shared by CMS with the ASM participant. As noted previously in this section of the proposed rule, there are important sensitivities surrounding the sharing of this type of individually identifiable health information, and CMS must ensure to the best of its ability that any beneficiary- identifiable data that it shares with ASM participants would be further protected in an appropriate fashion. We seek public comment on our proposal at Sec. 512.760(e) to require that the ASM participant agree to comply with all applicable laws and terms of the ASM data sharing agreement as a condition of retrieving beneficiary-identifiable data, and on our proposal that the ASM participant would need to submit the signed ASM data sharing agreement at least annually if the ASM participant wishes to retrieve the beneficiary-identifiable data. (b) Content of the ASM Data Sharing Agreement We recognize that ASM participants may already be required to comply with the HIPAA Privacy Security, and Breach Notification Rules ``(HIPAA Rules'') as covered entities themselves, or as employees or owners of HIPAA covered entities. However, since ASM participation is at the TIN-NPI level, we recognize that the TINs to which the ASM participants belong may be the covered entities, rather than the ASM participants themselves. Thus, we included language allowing ASM data sharing agreements to be executed between CMS and ASM participants or the covered entities that conduct HIPAA standard transactions on behalf of the ASM participants. We also propose at Sec. Sec. 512.760(e)(1)(i) through (v) to impose CMS-specific requirements within the ASM data sharing agreement to reinforce the Innovation Center's specific expectations and consequences for misuse, which is intended to protect the privacy and security CMS' beneficiary-identifiable data in the hands of ASM participants and any downstream recipients. We propose that under the ASM data sharing agreement, ASM participants would agree to certain terms, including: Complying with the requirements for use and disclosure of this ASM beneficiary-identifiable data that are imposed on covered entities, as defined by 45 CFR 160.103, by the regulations at 45 CFR part 160 and part 164, subparts A and E, including but not limited to ensuring the data will not be used for purposes outside of conducting health care operations as defined at 45 CFR 164.501 and as permitted by 45 CFR 164.506(c)(4) on behalf of their ASM beneficiaries Complying with privacy, security, breach notification, and data retention requirements specified by CMS in the ASM data sharing agreement if CMS deems such requirements necessary to safeguard beneficiary data, in addition to applicable law, such as the HIPAA Privacy, Security, and Breach Notification Rules Contractually binding any and each downstream recipient of the ASM beneficiary-identifiable data, such as persons or entities performing functions or services related to the ASM participant's data sharing activities including those that meet the definition of a business associate as defined at 45 CFR 160.103 and non-ASM participant parties to collaborative care arrangements described at Sec. 512.771, to the same terms and conditions to which the ASM participant is itself bound in its ASM data sharing agreement with CMS as a condition of the business associate's receipt of the ASM beneficiary-identifiable data obtained by the ASM participant Acknowledging that if the ASM participant or any downstream recipient misuses or discloses the ASM beneficiary- identifiable data in a manner that violates any applicable statutory or regulatory requirements or that is otherwise non-compliant with the provisions of the ASM data sharing agreement, CMS may do any or all of the following: deem the ASM participant ineligible to obtain ASM beneficiary-identifiable data for any amount of time, or subject the ASM participant to additional sanctions and penalties available under applicable law. An ASM participant must comply with all applicable laws and the terms of the ASM data sharing agreement to obtain ASM beneficiary-identifiable data. We propose at Sec. 512.760(e)(2) that CMS would share beneficiary- identifiable data with an ASM participant on the condition that the ASM participant and other individuals or entities performing functions or services related to the ASM participant's data sharing activities, including business associates of the ASM participant as defined at 45 CFR 160.103 and non-ASM participant parties to collaborative care arrangements described at Sec. 512.771, comply with all relevant laws governing the use of data and the privacy and security of individually identifiable health information and the proposed terms of the ASM data sharing agreement. We believe that these proposed terms for sharing beneficiary- identifiable data with ASM participants are appropriate and important, as CMS must ensure to the best of its ability that any beneficiary- identifiable data that it shares with ASM participants would be further protected by the ASM participant, and any business associates of the ASM participant as defined at 45 CFR 160.103 and non-ASM participant parties to collaborative care arrangements described at Sec. 512.771, in an appropriate fashion. We have these types of agreements in place as part of the governing documents of other models tested under section 1115A of the Act and in the Medicare Shared Savings Program. In these agreements, CMS typically requires the identification of data custodian(s) and imposes certain requirements related to administrative, physical, and technical safeguards for data storage and transmission; limitations on further use and disclosure of the data; procedures [[Page 32623]] for responding to data incidents and breaches; and data destruction and retention. These provisions would be in addition to any restrictions imposed by applicable law, such as the HIPAA Rules. These ASM data sharing agreement provisions would not prohibit the ASM participant from making any disclosures of the data otherwise required by law. We solicit public comments on this proposal at Sec. 512.760(e) to impose certain requirements in the ASM data sharing agreement related to privacy, security, data retention, breach notification, and data destruction. k. Proposed ASM Beneficiary Incentives, Collaborative Care Arrangements, and Applicability of CMS-Sponsored Model Safe Harbor at Sec. 1001.952(ii) (1) ASM Beneficiary Incentives As part of CMS' commitment to empower patients to actively participate and be accountable for quality and whole health outcomes, we invite ASM participants to think outside the box with regards to physical and lifestyle factors that contribute to the ASM's targeted chronic conditions. We propose at Sec. 512.770(a)(1) through (8) to allow ASM participants the option of providing in-kind patient engagement incentives, so long as the following criteria are met: The incentive must be provided directly by the ASM participant or by an agent of the ASM participant under the ASM participant's direction and control to an ASM beneficiary who is an established patient of the ASM participant. The ASM participant must be solely responsible for any costs associated with the provision of the incentive, including but not limited to, the retail value of the item or services offered as the ASM beneficiary incentive. The item or service provided must be reasonably connected to medical care provided by the ASM participant to an ASM beneficiary for an ASM targeted chronic condition. The item or service must be a preventive care item or service or an item or service that advances a clinical goal for an ASM beneficiary by engaging the ASM beneficiary in better managing an ASM targeted chronic condition. ASM's clinical goals are centered around promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and primary care providers to increase independent physician participation in value-based payment programs. The item or service must not be tied to the receipt of items or services outside the services furnished by the ASM participant to the ASM beneficiary. The item or service must not be tied to the receipt of items or services from a particular provider or supplier. The availability of the items or services must not be advertised or promoted, except that an ASM beneficiary may be made aware of the availability of the items or services at the time the ASM beneficiary could reasonably benefit from them. The cost of the items or services must not be shifted to any Federal health care program, as defined at section 1128B(f) of the Act. The totality of items or services, including technology as described at paragraph (b) of this section, provided to an ASM beneficiary may not exceed $1,000 in retail value for any one ASM beneficiary. We envision this could take the form of remote patient monitoring devices such as blood pressure monitors or scales with or without the capability to send data to their providers, vouchers for healthier food options or meal planning, and promotions for regular physical activity such as gym memberships or classes. These are, however, just examples and are not inclusive of all options available to ASM participants who offer beneficiary incentives. To safeguard against potential fraud, waste, and abuse, however, we propose to require limits on the retail value of offered items or services, when offered items must be retrieved from the ASM beneficiary, and when an ASM beneficiary becomes eligible for ASM beneficiary incentives. Specifically, due to multi-use nature of technological items and devices, we propose at Sec. 512.770(b)(1) and (2) the following stipulations for technology that is provided to ASM beneficiaries: Items or services involving technology provided to a ASM beneficiary must be the minimum necessary to advance a clinical goal of the model as proposed at Sec. 512.770(b), which are: promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and primary care providers to increase independent physician participation in value-based payment programs. Items of technology exceeding $75 in retail value must remain the property of the ASM participant. However, upon the end of their care relationship with the ASM participant, that technology must be retrieved from the ASM beneficiary with documentation of the ultimate date of retrieval. The ASM participant must document all retrieval attempts. In cases when the item of technology is not able to be retrieved, the ASM participant must determine why the item was not retrievable. If it was determined that the item was misappropriated, then the ASM participant must take steps to prevent future beneficiary incentives for that ASM beneficiary. Following this process, documented, diligent, good faith attempts to retrieve items of technology would be deemed to meet the retrieval requirement. If the provided technology breaks or is otherwise rendered unusable for its intended purposes, the technology must be retrieved from the ASM beneficiary with documentation of the ultimate date of retrieval. The ASM participant may replace the unusable unit with the same or similar technology, to the extent practicable, that meets the original requirements for the technology. In addition to the requirements on audits and record retention at Sec. 512.135, we propose at Sec. 512.770(c)(1) through (4) that ASM participants who wish to offer ASM beneficiary incentives must also ensure documentation of the incentives distributed according to the following requirements: ASM participants must maintain documentation of items and services furnished as beneficiary incentives that exceed $75 in retail value. The documentation must be established contemporaneously with the provision of the items and services with a record established and maintained to include at least the date the incentive is provided and the identity of the ASM beneficiary to whom the item or service was provided. The documentation regarding items of technology exceeding $75 in retail value must also include contemporaneous documentation of any attempt to retrieve technology at the end of an episode, or why the items were not retrievable. The ASM participant must retain and provide access to the required documentation. We seek comment on the proposed parameters at Sec. 512.770 for allowed ASM beneficiary incentives, especially regarding the practicality and feasibility [[Page 32624]] of the requirements around items of technology. (2) Collaborative Care Arrangements To support the goals of ASM, we propose to encourage ASM participants to enter into collaborative care arrangements with primary care practices to further the ASM participant's performance in the improvement activities ASM performance category or advance the clinical goals of ASM. To allow ASM participants greater flexibility when negotiating collaborative care arrangements, we propose at Sec. 512.771(a) to make the CMS-sponsored model arrangements safe harbor at 42 CFR 1001.952(ii)(1) available to ASM participants when establishing collaborative care arrangements so long as they comply with the requirements of that safe harbor and proposed Sec. 512.771. We propose at Sec. 512.771(a) to require all collaborative care arrangements to: Be in writing, signed by both parties, and containing the effective date of the collaborative care arrangement. Be exclusively between the ASM participant and the primary care practice with whom the ASM participant shares at least one established patient who is an ASM beneficiary, The arrangement must be entered into for the purpose of furthering the ASM participant's improvement activities or advancing at least one of ASM's three clinical goals proposed at Sec. 512.771(b), which are: promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and primary care providers to increase independent physician participation in value-based payment programs. Participation in a collaborative care arrangement must be voluntary and without penalty for nonparticipation. Both parties to the collaborative care arrangement must comply with all applicable statutes, regulations, and guidance, including without limitation: federal criminal laws; the False Claims Act (31 U.S.C. 3729 et seq.); the anti-kickback statute (42 U.S.C 1320a-7b(b)); the civil monetary penalties law (42 U.S.C. 1320a-7a); and the physician self-referral law (42 U.S.C. 1395nn). The opportunity to enter into a collaborative care arrangement, and the amount of any payment or other remuneration under a collaborative care arrangement, must not be conditioned directly or indirectly on the volume or value of past or anticipated referrals or business generated by, between, or among the parties to the collaborative care arrangement or any other person.